ASUS and Gigabyte call off joint venture plans

Posted on Friday, Mar 23 2007 @ 00:10 CET by Thomas De Maesschalck
Last summer on August 8th, Asus and Gigabyte announced they would form a joint venture to produce motherboards and graphics cards. This has now been called off:
The remarkable handshake of Gigabyte’s Chirman Dandy Yeh with Johnny Shih, CEO of ASUS, has astounded the whole market. It was just a months later on today, GIGABYTE and ASUS together announced they have called off the plan, while the subsidiary, Gigabyte United, remains.

A spokesman of GIGABYTE said a resolution of the board of directors was passed on the Mar 22 to call off the plan of forming joint venture. It’s explained the confusion of clients and suppliers, together with the changes of both internal and external factors has lead to this hard decision. In the present environment, the necessity of forming joint venture is no longer as strong as expected, and thus suspension is the best solution for both shareholders, said GIGABYTE’s spokesman.

Based on the agreement of suspension, ASUS is exempted from being penalized for the break off of investment at amount NT$3.92 Billion. It doesn’t give hurt to ASUS, but GIGABYTE whose previous planning on the new company has to be revised. Although the joint venture has given up, GIGABYTE intends to keep its move on transferring part of its businesses onto the new subsidiary, meaning Gigabyte United remains alive. In fact, GIGABYTE has already transferred its business of cooling system, cell phone, and notebook to the new company. It’s yet to know whether Gigabyte United would be renamed.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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