ASUS and Gigabyte suffering from low demand

DigiTimes writes Asustek and Gigabyte suffer from overstock Intel 4-series chipset inventories as demand was lower than expected due to the economic crisis and competition from low-cost PCs.

Lower-than-expected shipments of Intel's 4-series chipsets have caught motherboard makers off guard, leaving Asustek Computer and Gigabyte Technology carrying overstocks of 4-series-based motherboards which are rapidly depreciating in value as Intel prepares to launch its next-generation chipset series, according to motherboard industry sources.

Shipments of 4-series products have been low due to declining market demand and competition from low-cost PCs, the sources commented.

First-tier motherboard makers took on large inventory amounts from Intel under concerns they may lose supply priority or price discounts, the sources claimed. Asustek Computer is said to have taken the largest hit and currently still carries an inventory of 6-7 million units, equivalent to around NT$6 billion (US$180.57 million) in value, while Gigabyte Technology is said to be holding an inventory worth NT$4-5 billion, according to sources at the companies.

Motherboard makers are pushing Intel to delay its Havendale and Lynnfield processors, along with the 5-series chipsets so they have enough time to clear inventories. However, Intel is still planning to follow its original schedule.