Asus, Gigabyte form manufacturing Joint Venture for Motherboards

Dandy Yeh (left) and Johnny Shih (right), Gigabyte Chairman and AsusTeK CEO Hardware giants AsusTeK Computer Inc. and Gigabyte Technology have formed a strategic alliance in the motherboards and graphics cards spectrum by forming a collaboration that will develop Gigabyte branded motherboards.

The joint venture will have an initial capital of NT$8 billion, with 51% of the company being controlled by Gigabyte and 49% by ASUS. The company is expected to be fully operational in January of 2007.

Under the agreement, the chairman of the alliance will be appointed by Gigabyte, alongwith three board directors and one board supervisor on the board of directors. The remaining two seats on the board will be consigned by Asus.

In announcing the new company, Gigabyte Chairman Danny Yeh said that even though the two companies are rivals in sales and R&D, the alliance would guarantee a better development of their own brands.

It will also strengthen the hand of the two companies in competition with rival motherboard makers like Foxconn.

Commenting on the alliance, Prabodh Vyas, managing director, Gigabyte Technology India, said, “The alliance of two of the world’s largest motherboard and graphics card makers will leverage both companies’ economies of scale, research and development, and diverse product lines, to achieve greater synergy, and customers will get the benefit of better quality.”