August 2000 Industry Update

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Motherboard Update

As mentioned last month, motherboard pricing has become a bit of a concern in the industry. Component prices have risen appreciably, design requirements have driven up materials costs, and chipset prices have stabilized now that Intel and VIA are not battling head-to-head.

Another issue that some manufacturers and resellers have reported, is that sales were very slow during July, and they don’t see any indications that it will pick up in August. The reasons are not clear, but a number of transition, pricing and availability issues all coming to the fore at the same time seem to be contributing.

Shortages of Intel processors seem to have kept a certain number of buyers out of the market for the past few months, though improved availability over the past few weeks has brought back some of the buyers. Also, the transition from an Intel dominated chipset market to a VIA dominated market seems to have some buyers a bit wary. The seemingly on-again/off-again DRDRAM support from Intel seems to have kept a few customers on the sidelines until the outcome of the DDR vs. DRDRAM issue is more clear. Finally, with no good, low-cost upgrades for Socket 7 owners available, many are opting to wait for prices to drop.

During the past few months, it seems that some Taiwanese motherboard manufacturers may have bypassed normal channels and sold product directly to some of the low-price resellers just for cash flow. This may account for the very wide range of motherboard prices, which has in turn caused some headaches for those who buy through authorized channels. With some resellers able to offer P6 and K7 boards in the $100 range, it has created a perception that these are real prices, thereby squeezing profit margins and possibly causing some buyers to wait for prices to drop to more ‘reasonable’ levels from the authorized sources.

Looking forward to Q4, most of those I spoke with are anticipating a good Christmas season, though they are a little uncertain. Low priced Athlon processors and new DDR capable products are being looked at to drive a lot of new sales. Unfortunately, if the transition to DDR is slower than anticipated, and if motherboard component prices and availability don’t ease up a bit, sales of Duron and Celeron boards and systems may be a bit disappointing.

Slot 1 / Socket 370 boards

According to several manufacturers and resellers I spoke with, i815 based boards are becoming very popular, as expected. Though intended as a low-end solution, it seems that most DIYers are pairing it with a PIII rather than. a Celeron, because the cost of the board doesn’t seem to justify putting a ‘cheap’ processor on to it.

Motherboards based upon the i810 chipset are still being built, however the i820 market is dead, with the exception of the OEM market, and even then only a very small number. The Intel roadmaps show that the i440BX chipset is scheduled to be at end-of-life during Q3, however it would seem likely that they will extend that out for a few months to help fill in for the lack of i820 volume.

VIA chipsets dominate the upper range of the market, with the 693A and 694X chipsets being the most popular. Interestingly, 693A based boards still outnumber 694X boards according to a few motherboard manufacturers.

DDR capable motherboards for Intel platforms appear to still be several months away. VIA will release their DDR chipset for Intel first sometime early in Q4, however manufacturers don’t anticipate volume production of boards until late in the quarter. On this front, it appears that Intel will lag AMD by a few months.

Slot A / Socket A boards

Slot A motherboards are still available in the market, though they have little demand. With the lack of advanced features on the AMD 750 chipset, and the reported problems with the KX133 chipset, users are not willing to spend their hard-earned dollars on ‘old’ technology. There were reportedly about 1.5 million Slot A boards still unsold in June, and though AMD did apparently release a number of Slot A processors in late June/early July, the demand was still very low, leaving manufacturers less than enthusiastic about going to the Socket A platform.

KT133 based boards are now starting to become available in quantity, with resellers reporting good availability of product from Biostar, ASUS, FIC, Gigabyte and MSI. Other manufacturers have plans to release product shortly. There were reports of chipset availability issues early on, apparently because of poor yields. This seems to have been overcome, however there are now some reports of EMI issues as well as shortages of the clock generator from ICST, which is the only clock chip for the chipset.

One of the major issues that concern manufacturers, resellers and OEMs is the fact that there are no alternative chipsets for the Athlon platform. The PIII platform has several available chipsets from both Intel and VIA, which allows manufacturers a lot of flexibility in design and price points. For the Athlon platform, the only viable chipset is the KT133, so prices are locked within a fairly narrow range, with motherboards selling through official channels anywhere from $120 to $170.

This pricing issue has limited the sales of Duron processors in the retail space, and perhaps somewhat in the OEM market. For the same reason that buyers are matching the i815 boards with PIII processors instead of Celerons, the cost of K7 boards means most buyers want to match them up with Tbirds. The release of the KM133 should help to alleviate this problem, though component prices may continue to cause pricing problems.

It appears that the AMD 760 chipset is very close to release, with motherboards anticipated early in Q4 – at least two months before DDR capable PIII boards. It could be a close call as to whether an ALi or AMD based board will be the first to appear. Chances of an SiS based Athlon board this year are very low, and a Micron based board is all but out of the question at this time.

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