Motherboard makers to rein in future expansion

As prospects for the world's personal computer market remain uncertain for the time being, several domestic motherboard makers have decided to slow down their expansion plans for the year 2001.

According to local media, motherboard companies such as Shuttle Inc (浩鑫), Biostar Microtech International Corp (映泰), Soyo Computer Inc (梅捷) and Iwill Corp (艾崴) all intend to slow down their expansions and to watch market trends for a while.

Exceptions to this trend are Asustek Computer Inc (華碩), Giga-Byte Technology (技嘉), and Micro Star (微星). Factories that will continue to expand production are also staying flexible in order to avoid possible idle productive capacity.

Taiwan's motherboard industry has grown speedily in the last few years, and its production capacity once lagged behind orders. After capacity improved in 1999, however, the supply of motherboards surpassed demand for the very first time this year.

Due to low buyer sentiment after the COMDEX/Fall, companies are also trying to reduce their storage, forcing prices for motherboards to drop.

According to Gigabyte Technology general manager Ma Meng-ming (馬孟明), although his company will proceed with the scheduled expansion plan in order to win more orders during the peak period, the company might adjust its policy, according to market trends, if necessary. "We will be very flexible on our production next year," Ma said.

Those who will postpone their expansion plans believe that the companies' profits for next year will not be harmed since they are now developing new models of motherboards as well as other hi-tech products. These companies say that 20 to 30 percent profit growth is still expected.