Asustek wins Sony's desktop PC order, fueling competition with Hon Hai

Taipei, July 8, 2005 (CENS)--After gaining a solid foothold in motherboard business, Asustek Computer Inc. of Taiwan, the world's No. 1 motherboard maker, has been actively trying to venture into the barebone or complete-PC market and has won an order for desktop PCs from Sony of Japan.

Asustek is scheduled to begin big-volume shipment to Sony in the second half of the year.

Industry sources said that Asustek's move is expected to heat up competition with major rivals such as Hon Hai Precision Ind. Co. Ltd., MiTAC International Corp. and Tatung Co.

Hon Hai, currently the world's largest maker of connectors, barebone PCs and game consoles, recently also won HP's orders for consumer desktop PCs. Industry sources said that Hon Hai is expected to challenge Asustek's No. 1 position in global motherboard market next year as the former has been actively developing its Foxconn-branded motherboards.

Hon Hai aims to ship 40 million motherboards this year, including both own-brand and original equipment manufacturing (OEM) products, and Asustek about 52 million.

Industry insiders pointed out that Asustek won HP's consumer desktop order last year and Sony's order this year. Sony shipped about one million desktop PCs last year, mostly to the U.S. and Japanese markets.

Statistics compiled by International Data Corp. (IDC) showed that HP shipped about 18.83 million desktop PCs globally last year and the volume is expected to outstrip 20 million units this year. As HP always releases its desktop PC orders to contract suppliers instead of keeping most assembly works in-house like major rival Dell, HP's order-placing decision has been winning intensive attention.

Asustek's R&D vice president Chen Jian-chung pointed out that about 60% of his company's motherboards are currently shipped together with barebone- or complete-PCs.

Hon Hai, Taiwan's largest private maker, has been actively integrating related resources, such as parts/component manufacturing and molds/dies development, and moving forward into motherboard and complete-PC sectors. Currently, Hon Hai already contract supplies desktop PC products to the world's top-10 brands.