Future Gigabyte mobos to be co-produced with Asus
In early August, Asustek and Gigabyte announced that they were forming a joint venture to produce graphics cards and motherboards under the Gigabyte brand. Three months later, Gigabyte has announced that it will in fact transfer its own motherboard and graphics card businesses to the joint venture, which will be dubbed Gigabyte United. Gigabyte's shareholders have approved the transition of the businesses, which are together worth the equivalent of $124 million. Gigabyte United is scheduled to begin operations on January 1, 2007, with Asustek holding a 49% stake and Gigabyte holding 51%.
According to Gigabyte chairman Dandy Yeh, the deal will quell competition between Asustek and Gigabyte, and it will integrate the two companies' resources in order to improve competitiveness with third parties. In particular, Foxconn has been seen as a threat to Asustek's dominance of the motherboard market, and rumors were circulating this summer that Foxconn was itself looking to negotiate a merger deal with Gigabyte.