Gigabyte to offer cheaper motherboards under Gigatrend brandname

Gigabyte Technology is one of the largest mainboard makers on the planet and belongs to the so-called Taiwanese Big Four manufacturers. However, its shipments are usually considerably lower than the number of mainboards supplied by ASUSTeK, MSI or ECS since Gigabyte focuses on higher-end offerings leaving spacious market of entry-level solutions to its competitors. Even though this allows the company to post higher gross-margins and receive more profits from every SKU it sells, more and more customers prefer top-to-bottom product families that include cost-effective, mainstream and high-end solutions and Gigabyte needs to respond to the general trend somehow.

Following ASUS and its ASRock subsidiary established in late 2002, Gigabyte is said to found Gigatrend company, who will build cost-effective mainboards. The first shipments of Gigatrend are expected to start in March 2004.

Initially, Gigatrend will outsource production to its parent company, DigiTimes web-site reported. But for the price-conscious entry-level market, Gigatrend will be forced to outsource production of entry-level mainboards to contract manufacturers to lower costs. ASRock outsources about 50% of its production to contract makers in Shenzhen, Guangdong Province (China). Reportedly, Gigatrend will outsource some of its products to ECS and Foxconn Electronics.

Though the actual branding strategy and some other things still require development, it is pretty clear that the general strategy of Gigabyte is pretty clear and no surprising – all the company needs is to offer entry-level products for its existing clients, but not to gain a lot of new contracts, as ECS and Foxconn are very aggressive in terms of pricing to OEMs interested in lower costs.