Motherboard makers slashing prices due to weak demand

DigiTimes reports motherboard makers suffered big sales drops in Q2 2016 as demand came in weaker than expected. Many motherboard makers saw a sequential drop of over 20 percent, with some suffering declines of around 30 percent.

Things aren't looking too good for the current quarter either, orders remain weak and motherboard players are cutting prices in an attempt to boost sales. The site notes Asustek has the advantage here because of its deep pockets. The continued issues are pushing some second-tier motherboard makers to leave the market.

Asustek Computer and Gigabyte Technology shipped 17.8 and 17.1 million motherboards in 2015, respectively, dropping from around 19 million units in 2014. With motherboard demand estimated to remain weak in the second half of 2016 and issues including exchange rate fluctuations, political uncertainties and delay of Intel's Kaby Lake platform, the sources expect Asustek and Gigabyte to see over 5% on-year declines in 2016 shipments.

A few Taiwan- and China-based second-tier players are reportedly leaving the motherboard market and will turn to focus on other businesses. If they leave, their motherboard orders, which are for mostly entry-level to mid-range models, are expected to be taken by Asustek and Gigabyte, contributing around one million units in shipments altogether. With the orders, the top-2 motherboard players' shipments in 2016 are expected to have a chance to remain at the same levels as those in 2015.