Intel plans to continue to ship its entry-level 865-series chipsets in the first quarter of 2007, with an amount to account for 10% of its total chipset shipments, according to sources at Taiwan motherboard makers.
The motherboard makers feel that Intel's latest 865 series roadmap could affect their sales in the second half of this year, although the move is aiming at protecting Intel's market shares in the entry-level and OEM segments.
Local motherboard makers have been hoping that a planned July CPU price cut by both Intel and Advanced Micro Devices (AMD) will help stimulate demand for motherboards based on more advanced chipsets as makers have been laboring to reduce the inventory of their 865-based models after they received a massive quantity of 865 chipsets from Intel in the second quarter of this year.
Due to the impact of high inventory and the migration to RoHS-compliant products, Taiwan motherboard makers were mired in a wave of price competitions in the first five months of this year, resulting in a sharp decline of gross margins and profitability for the makers, the sources indicated.
With Intel's decision to continue pouring the 865 series into the market, local motherboard makers may not be able to efficiently reduce their 865-based inventories while continuing their price cuts in the second half, the sources contended.
While the proportion of the 865 series will remain at 10%, the 946/965-series chipsets will become mainstream in the first quarter of 2007, accounting for 70% of Intel's total chipset shipments, the sources noted.




