Asus, Gigabyte to form joint venture

— 10:43 AM on August 8, 2006

This may not be Asus' rumored acquisition of Gigabyte, but the two companies are joining forces. Asus and Gigabyte have announced the creation of a joint venture that will produce motherboards and graphics cards under the Gigabyte brand.

The Asustek-Gigabyte joint venture will be established with an initial capital of NT$8 billion (US$244 million), with 51% of the company being controlled by Gigabyte and 49% by Asustek. Under the agreement, the chairman of the joint venture will be appointed by Gigabyte, as well as three directors and one supervisor on the board of directors of the new company. The remaining two seats on the company's board will be assigned by Asustek, according to the companies.
The venture will begin operations on January 1, 2007. According to DigiTimes, the extra capacity from Asus will let Gigabyte compete more effectively against ECS and MSI. The creation of this joint venture may also be an effort to prevent Foxconn from getting its hands on Gigabyte. Industry sources claim Foxconn was looking to negotiate a merger, which could have allowed it to overtake Asus in terms of motherboard shipments.
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