Info-Tek Corporation was founded in 1990 as a contract manufacturer for motherboards and interface cards and is invested by motherboard maker Gigabyte. The company has production centers in Taiwan and China, and is best known for its GeCube-branded graphics cards under its multimedia business unit. The company recently has made a push into the consumer electronics sector to adapt to increasing competition and a changing business environment while continuing to develop its graphics card line. DigiTimes.com recently interviewed Mr. Larry Yeo, general manager of Info-Tek’s multimedia business unit, at their Taipei headquarters.
Q: How has the GeCube brand fared in the past couple years? Can you share some shipment figures?
A: We are among the four major suppliers of ATI [graphics cards] worldwide. Out of graphics cards shipped worldwide, 55% of our revenue comes from Europe and 5% from the US. We ship about 150,000 graphics cards a month on average and reach about a maximum of 200,000 a month during peak season.
Q: What is the advantage of working exclusively with ATI and not with any other graphics chip makers?
A: In terms of ATI’s exclusive partners there are only four in the world, two in Hong Kong and two in Taiwan. Out of the two in Taiwan we are one of them. Working with ATI alone, we have less competitors. In terms of location, pricing, we have a lot more advantages being an exclusive partner. With new product launches we can get products out earlier since we get special treatment [from ATI]. In working with ATI we are very familiar with their design and their development team after many years of working very closely with them.
In addition, we are among the few companies whose full range of graphics cards products are certified by ATI.
Q: Since you do OEM work in addition to having your own branded products, how do you manage conflicts of interest?
A: For every region, we appoint only one distributor so we don’t complicate the competition. In regions where our OEM is strong, we don’t penetrate our own brand, we keep out of the region. We know the regions where we are strong in OEM, like the US, Japan and Korea. We are very strong in Europe in distribution of our own-brand.
Q: With so many choices of graphics cards on the market, what sets GeCube apart from the competition?
A: For graphics cards we redesign from the reference designs from ATI. We improve the design and implement more features. From our product lines you can see that we have quite a few groups working on design. We don’t like to compete for the lowest value, we can’t compete for the lowest value. We have our own brand, we have our own value. There’s no point in promoting a brand that’s too cheap.
This year, about 60% of our revenues from graphics cards will come from mainstream cards, with 5% from the high-end, and the rest from the value segment.
Q: How did your company do last year?
A: Last year, we pulled in NT$2.3 billion from graphics cards. Currently about 80% of our graphics card business is from our branded business while 20% is for OEM. Compared to the likes of Gigabyte, though, they are like a dinosaur and we are like a small mouse.
Q: What about other products? I understand that the GeCube brand has recently started to include consumer electronics products.
A: We just released our line of consumer electronics at the end of December 2005 and we should see momentum pick up after the second quarter. About 10-15% of our revenues should come from consumer electronics and the rest from graphics cards. This year, our target amount is NT$3 billion in revenues from all our businesses.
In the future, we would like to see 45% of our business come from consumer electronics and 55% from graphics cards since we are quite strong in the DIY market. In the consumer electronics market you can earn margins of 15% while graphics cards have margins of only 7% since its quite competitive.
Q: I can understand your need to develop other markets due to increasing competition from big players in the graphics cards market, but why expand into the personal consumer electronics in particular and not other areas?
A: GeCube focuses on the Internet, entertainment, and 3D gaming areas, so we develop our products more along the entertainment product line. Most of our channel customers are based on this [entertainment] product base so it’s easy for us to educate our customers. If we were to get into something like large-scale networking, it might be a problem for us. GeCube has a solid customer base worldwide, about 120 customers worldwide, so the entertainment market is an easy area to transition into.
Q: What are some of the difficulties and problems you have encountered in trying to meet your goals in adapting to the market?
A: Of course competitors! We are quite conservative in our planning so that’s why we grow gradually. We’ve learned from our competitors that what goes up fast can come down fast, so we want to gain momentum gradually and go step-by-step. That way, things are more solid. Our customers are our income, if we get hurt that means our customers get hurt and that’s not good. We think from the market side, we don’t think from the company side so our customers are very willing to communicate with us on planning of sales.
Q: What are some new products that will be released this year?
A: We are working on a VoIP product similar to SkypeOut which we’ll demonstrate at CeBIT. It has a seven-inch display panel for video and you can phone out through the Internet. This should be available in April.
We have a portable digital tuner (DVBT – digital video broadcast terrestrial) that is being made with the World Cup and 2008 Olympics in mind, which will also be shown at CeBIT. That unit should be available sometime in June. All our consumer electronic products should be released in the second quarter.
We also have another product we’ll be releasing, a dual GPU graphics card, which we’ve tentatively named “Gemini.” It’ll be based on the X1000 series GPU from ATI and will have four DVI output ports which can simultaneously display four different DVD streams. Our objective here is to get into the video market. This probably will be available by April after we display it at CeBIT and fine tune the drivers. We’ll probably first launch the X1600XT high-end version for around US$399.
Q: Are there any parting thoughts or insights you’d like to share with our readers?
A: Technology is always changing, it’s how you meet the challenge and adapt to the change. Companies will fail if they don’t go along with the wind. If a company goes against the wind, then it will go down. We are always ready to meet any change, that’s our policy.
Larry Yeo, general manager of Info-tek’s multimedia business unit
Photo: Eric Mah, DigiTimes.com, February 2006
Article edited by Eric Mah
