Taiwan's New Economy is Sink or Swim

Shoot At Your Products

ESD testing is another discipline that is required by the large system brands. It evaluates the effects of an electrostatic discharge on a product upon human or other contact. This testing requires test equipment and allows shooting up to 15,000 V at different products. However, this test only makes sense for PCs or notebooks (which are closed and should earth well) - components would be fried instantly.

More Testing ?

There is still more you can do. Sometimes you even have to do specific testing in order to get orders from the big guys. One example is vibration testing, which simulates the transportation process from the factory all the way to the customer. Drop testing would be another example - but this focusses on the packaging rather than the product itself.

Conclusion

From a technical standpoint, building a motherboard is an easy thing. But it is increasingly difficult to make profit with it : The heavyweights Asus, Foxconn, ECS, MSI and Gigabyte control the majority of the market. Only three of them might be left shortly because fierce competition drives everybody out of the manufacturing business : You need a system business to provide large quantities, so you can purchase components to also think of a retail business, which, again, you need in order to create a certain level of brand-awareness. You need to do OEM system (or notebook) business because no Taiwanese brand would ever be preferred over the well-known Dell’s, HP’s, Gateway’s - and others - by most customers.

As we’ve seen, the requirements for reeling in five-digit system orders have risen - partly due to stringent customer requirements and also by the heavyweights trying to find differentiation from each other. A system OEM needs to cut and microscope, heat up, cool down, photograph, shoot, drop, shake and try out products before it can think of approaching the big brands. One way or the other, it has become impossible for 2nd tier and smaller companies to build components on their own. Aopen almost went out of the retail component business, Abit was bought by USI and now goes under "Universal Abit", Biostar tried a comeback with its T-Series boards (and a manufacturing contractor), DFI sustains its motherboard business thanks to its ambitions in industrial segments. Chaintech, Soltek and Soyo had to surrender earlier, and even a 1st tier like Gigabyte was recently added to another empire.

ECS has been moving aggressively because it feels that it can reach the level that Asus and Foxconn are playing at - and because it does not want to be downgraded to where MSI and Gigabyte are. What an interesting topic MSI is these days : Everybody else is virtually gone, and three heavyweights are battling for supremacy now. Wouldn’t the style-ful MSI brand be a nice acquisition as well ? After all, the firm turned from a boring motherboard company into a lively, diversified 21st century brand over the last couple of years. This scenario certainly is pure speculation for now ; but on the other hand only few saw the Asus/Gigabyte deal coming...

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