Strategic alliance in motherboards and graphics cards

Aug 11, 2006 09:18 GMT  ·  By

Three years ago, ASUS and Gigabyte were fighting for various sectors of the hardware market. The biggest fight was for the users of motherboards and graphics cards in the medium level. Those fights were usually motives for ASUS to demonstrate its superiority, according to various review articles from that time, comparing the two (like ?Asus vs. Gigabyte: The Tale Of Two nForce2 Ultra 400 Boards" by Chris Connolly from GamePC).

Back then, ASUS announced its NVidia GeForce FX 5950 Ultra and GeForce FX 5700-based graphics cards to complement ATI RADEON 9800 XT and other ATI-powered family. The new products carried 256MB of DDR SDRAM memory onboard and had the typical set of output connectors, D-Sub, DVI-I and TV-Out. ASUS' V9980 and V9570 equipped with NV38 and NV36 graphics processors respectively were clocked at 475/950MHz and 425/550MHz for core and memory. Gigabyte, who re-joined the list of Nvidia add-in-card partners with its GeForce FX 5950 Ultra and other powerful GPUs from the Santa Clara, California-based GPU designer, also reiterated its commitment to ATI Technologies by showcasing its RADEON 9800 XT and 9600 XT products.

But times changed, and on August 8 2006, Gigabyte Technology and ASUSTeK Computer Inc. announced their strategic alliance in motherboards and graphics cards. Naturally, there are some back-ends to this story, as the new born giant will produce Gigabyte branded motherboards. Also, in the new company, which has a capital of NT$8.000.000.000, Gigabyte makes all the decisions, as it holds 51% of all shares, and has the right to name the chairman and three board directors. ASUS only gets two seats in the new joint-venture, which is expected to be fully operational in January 2007.

At first sight, it seems like a good opportunity for the two companies to improve their sales by achieving a monopoly, as well as joining forces in developing new strategies for research and development. Also, this seems like a chance for the average user to benefit from the low prices that will eventually hit the market in the next years if things go as planned. At a closer look it may be the perfect time for Gigabyte to take over one of their long-time adversaries, and revenge the years in which it has been bested.

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