In accordance with the relevant regulations according to Company Law,
Securities Law and Business Merger & Acquisition Law, a resolution of the
board of directors was passed on the 8th of August, 2006 for GIGABYTE Technology
Co., LTD (Stock Code: 2376) to transfer the relevant assets and businesses of
its own branded motherboards and VGA cards to a newly established subsidiary.
After all the necessary legal procedures and obligations have been fulfilled,
ASUSTek Computer Inc. (Stock Code: 2357) plans to invest in this newly
established GIGABYTE subsidiary to help manage the joint venture and develop a
strategic alliance with GIGABYTE. Both parties will work together to increase
operation efficiency, enhance product quality, provide better customer service
and create a higher value for shareholders.
The capital of this joint venture will be NT$ 8,000,000,000 (eight billion NT
dollars). GIGABYTE Technology intends to hold 51% of the shares and ASUSTek will
hold 49%. This joint venture plans to commence operating in January 2007. There
will be five directors and two supervisors in this joint venture, with GIGABYTE
appointing three seats of directors and one supervisor, and ASUSTek appointing
two directors and one supervisor.
According to the Institute of Information Industry (MIC), the total value of
motherboards produced in 2005 was US$8.9 billion, a growth rate of only 2.2%
from year 2004. The total value of motherboards produced for the first half of
2006 has fallen to US$3.67 billion in comparison to the US$3.75 billion for the
first half of 2005. In addition, the leading brand PC manufacturers have
increasingly enlarged their market share, causing the market share for the
motherboard channel to decline dramatically. In this slow developing market
environment, GIGABYTE seeks to establish an alliance with ASUSTek in order to
assist the operation efficiency of GIGABYTE’s motherboard business. Apart from
increased efficiency, GIGABYTE will have greater resources to expand their
diversified business. Because of the increasingly mature nature of the
motherboard industry, this joint venture will combine the resources of two
leading motherboard manufacturers, allowing for a greater economical impact on
the market, better research and development capabilities and elevated product
quality. It is believed that this strategic alliance will create a win-win
situation for shareholders, employees and customers of both companies.
GIGABYTE Technology Co., Ltd is one of the five largest motherboard
manufacturers in the world. Its products include motherboards, VGA cards,
barebone systems, networking and communication products, servers and digital
home devices. Through its subsidiaries, GIGABYTE also focuses on notebook and
mobile communications research, development and marketing. GIGABYTE sold 16
million units motherboards in 2005 and expects to ship 18 million units in 2006.
GIGABYTE currently has more than 8,000 employees worldwide.