ASUS and Gigabyte combine forces

Written by Brett Thomas

August 9, 2006 | 18:56

Tags: #asustek #motherboard

Companies: #asus #ecs #foxconn #gigabyte #msi

"By our powers combined!" The tag line for good ol' Captain Planet comes to mind, as rivals ASUS and Gigabyte announced their new joint venture. The battling Taipei companies have agreed to work together on upcoming motherboards and video cards in a deal that is worth roughly $244 million USD.

Specifics of the deal illustrate exactly how aggressive the market for motherboard production is becoming, as the only way either company feels that they can increase profits is to work together. The companies are both sponsoring a 'daughter company,' which will be owned 51% by Gigabyte and 49% by ASUSTeK. This company will have access to ASUSTeK's production facilities while producing Gigabyte-designed products, in a move that will pair ASUS quality production with Gigabyte's sales and marketing ability.

The company will begin operation at the start of 2007. It will be led by a 10 person board, of which Gigabyte will choose seven members and ASUSTeK will choose the other three. There will be a new name for the venture, but both companies are currently keeping mum on it.

Gigabyte and ASUSTeK are both considered top-rate motherboard manufacturers, and their merger is going to put a lot of pressure on industry upstarts like Foxconn and ECS, who have been pushing into the higher-end market with force lately. It will also force the hand of MSI, a company that has largely remained out of the headlines as of late...could we see yet more acquisition?

It seems like ever since NVidia snatched up ULi, the chip and board manufacturing industry has been pairing off and trying to increase efficiency. Will all these combined companies help to deliver a better product, or just less competition and innovation? Let us know your thoughts in our forums.
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