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Mobo makers giving up networking equipment business
Charles Chou, Taipei; Rodney Chan, DIGITIMES [Friday 3 June 2005]

Taiwan’s motherboard makers have mostly exited the low-margin networking products sector that has not met their expectations for business diversification, according to industry sources. The motherboard makers entered the networking equipment sector two to three years ago, when the sector looked promising, the sources said.

In spite of the efforts by Elitegroup Computer Systems (ECS), Albatron Technology, Abit Computer, and other second-tier mobo makers, they have failed to make any substantial inroads into the networking sector, and are now choosing to stay focused on defending their core businesses from being completely wiped out by top players Asustek and Foxconn (the registered trade name of Hon Hai Precision Industry).

Asustek and Foxconn expect to ship 52 million and 40 million motherboards, respectively, in 2005, widening their gap with the two other first-tier mobo makers, Micro-Star International (MSI) and Gigabyte.

MSI remains in the networking sector, but it has shifted its focus to the niche market from the low-margin WLAN segment by developing products integrating the Bluetooth and WLAN technologies, market sources said.

Asustek and Gigabyte are still active in the networking products market.

Asustek offers a wide range of networking products from WLAN and broadband solutions, to home-use gateway and SOHO equipment.

Gigabyte’s chief networking products include WLAN and Bluetooth solutions, switches, and home-use gateway.

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