April 2001 Industry Update

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Motherboards and Chipsets

VIA continues to make gains in the chipset market, and continues to buck the PC slowdown trend. In January of this year, VIA posted revenues of over $99 million (USD), and followed with a 7.3% increase in February with revenues of over $100 million (USD). Just a few weeks ago VIA again showed the strength of their business model with a better than 20% gain in revenues for March, at more than $123 million in revenues (USD). Furthermore, these revenues are more than 84% higher than the same three months last year.

What makes this significant to me is that in the first calendar quarter last year is when I noticed that VIA had taken a significant portion of the chipset market from Intel. Obviously, VIA continued to gain on Intel during the past year, as I have reported in previous installments of this column, and which I have speculated is due to the success of the Socket A Athlon (as well as continued support of the Socket 7 platform). Now, it appears that reports from Taiwan are saying this same thing, as reported at this URL: http://chinese.via.com.tw/jsp/big5/news/news_result.jsp?News_No=3098. A rough translation of this article is that Socket A chipsets account for over 30% of the top motherboard makers in Taiwan, and over 50% for some second-tier manufacturers. In Q4, the percentage of motherboards shipped that supported AMD processors (including Socket 7) was about 22%, but now it is more than 30%, according to the article. This corresponds with that I have been hearing for the past several months.

On the other end of the spectrum, some publications are now reporting that P4 motherboard sales were fairly dismal the past quarter, with less than half of the expected volume from the top Taiwanese motherboard makers. One anonymous source close to a top 5 manufacturer told me that even the 40,000 units claimed is probably way too high. This again corresponds with what I have been saying in the past several columns, which should give some additional credibility to that information, despite some claims by Intel that the P4 is ramping faster than any other processor in their history.

To round things out, some Asian business publications have claimed that sales for the top motherboard makers has picked up a bit since the first of the year, with ASUS reportedly having a significant increase. Again, this seems to be consistent with my recent reports that there are some signs that the PC slowdown may have begun to pick back up. This would be welcome relief for many in the industry.

In putting all of these pieces together, it would seem that the only conclusion that can be made is that the Athlon platform has really picked up in the past few months. With 3rd party P4 motherboards relatively non-existent, and Socket A based motherboards increasing in market share, the momentum clearly seems to be with AMD at this time.

In order to combat this trend, Intel appears to have a strategy in place, and it looks like that strategy may include a DDR chipset for P4 far sooner than expected. There have been some recent reports that Intel is preparing motherboard makers for the possible introduction of an i845 chipset that will support both DDR and SDRAM in Q3. At this time, it appears that Intel will have two flavors of the i845 – one that supports SDRAM only (845A) and one that supports both DDR and SDRAM (845B), though each motherboard maker will need to decide which will be implemented (the chipset may not have the ability to distinguish them). The price difference is reportedly about $5, and both will support the 478 pin package that will house the Northwood chip, as well as the current 423 pin package.

Motherboard makers will also have to decide whether to have models with a Socket 423, or to only go with a Socket 478. Early indications are that they may decide to produce a lower cost Socket 423 board for the mid-range desktop.

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