Tue, Sep 27, 2005 - Page 10 News List

Elitegroup gets order for motherboards

By Jason Tan  /  STAFF REPORTER

Elitegroup Computer Systems Co (精英電腦), one of Taiwan's major motherboard makers, has recently received orders from Hewlett-Packard Co to supply motherboards for its personal computers (PCs), a company official said yesterday.

"We will start mass producing the products as early as November," Elitegroup's spokesman David Mao (毛遠錚) told the Taipei Times.

Mao made the remark in response to a report in the Chinese-language Economic Daily News yesterday, which revealed the partnership.

The report said that the deal is seen as an aggressive attempt from the motherboard maker to secure a foothold into the PC original equipment manufacturing industry.

As the industry is already saturated, the entrance of Elitegroup will pose a threat to other big players such as Hon Hai Precision Industry Inc (鴻海精密) and Asustek Computer Inc (華碩電腦), which will force out smaller rivals.

HP's Taiwan branch office declined to comment on the report.

The computer giant currently has roped in Hon Hai and Asustek as its desktop OEM partners, and the company evaluates the partner performance on a quarterly basis, said Jessica Chong (鍾錦蓮), product marketing director at HP Taiwan's product center development division, on the sidelines of the center's third-anniversary celebration last Thursday.

Goldman Sachs has recently adjusted upward the fourth-quarter motherboard shipments of Elitegroup to 5.48 million units.

This translates to 17.7 percent growth from an earlier projected 11.4 percent, the highest among motherboard makers.

The company will report an average monthly shipment of 1.8 million motherboards in the fourth quarter, with the peak falling in November at around 1.95 million units, the investment banking firm said.

However, Mao said that Elitegroup's motherboard shipments in the fourth quarter are expected to grow only 10 percent over the third, driven by the traditional peak season.

"We are conservative about fourth-quarter growth, as there are other uncertain factors, such as the shortage of chipsets, to be resolved," he said.

The company sets to ship around 20 million motherboards this year, up from 17 million units last year, he added.

Shares of Elitegroup remained unchanged at NT$23.20 on the Taiwan Stock Exchange yesterday.

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