Paul and thread,
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Intel's Graphics Entry Alarms Taiwanese Board Makers
(02/17/98; 2:07 p.m. EST)
By Sandy Chen, Electronic Buyers' News
The introduction of Intel's i740 graphics processor in Taipei, Taiwan, on Tuesday is sending a new wave of fear and terror on the island, especially among its add-on card makers.
Intel is pushing its i740 for the add-on card market, but the Santa Clara, Calif.-based semiconductor giant said it hopes to put its graphics chip on the PC motherboard once it becomes cost-effective -- a move that could eliminate Taiwan's large graphics card industry, according to local analysts.
Taiwan is the world's largest maker of graphics cards with 43.6 percent market share in 1997, according to the government-sponsored Market Intelligence Center (MIC), in Taipei. Taiwan's graphic card makers shipped 14.5 million units in 1997, up from 11.5 million units in 1996, MIC added.
At present, there are about 120 graphics card makers in Taiwan, according to the Taiwan Computer Association (TCA), a Taipei-based trade association. Only a few of Taiwan's add-on card makers sell products under their own logos. Most vendors make add-on cards on an OEM basis for foreign companies.
At a media event in Taipei Tuesday, Intel made no secret that it will push its i740 onto the motherboard in the not-to-distant future. Intel actually introduced the i740 last week, offering the chip at $34.75 each, in volume lots.
At the media event, Brian Ekiss, graphics marketing manager for Intel, said as the price for the i740 goes down to $20, it will be possible to incorporate the chip on the motherboard. Ekiss, however, did not elaborate when the i740 would hit the magic $20 price point.
Still, the long-awaited i740 chip has sent many add-on card makers scrambling in Taiwan. Some local suppliers will simply disappear. A few others are being forced to jump into the motherboard business as a mean of survival, according to analysts.
For example, Leadtek Research, one of Taiwan's largest graphics card makers, rolled out this week an add-on product based on Intel's i740 chip. But to be on the safe side, Taipei-based Leadtek said it plans to enter the motherboard business this year, according to several sources.
Other Taiwan companies are in a better position. Taipei-based Asustek Computer also rolled out this week a graphics card based on Intel's i740. However, Asustek has been a major player in the PC motherboard business for years and will have no problem incorporating the i740 on the board.
This is not the first time Taiwan has been at odds with Intel. In the mid-1990s, Intel began to reassert itself in the PC chip set business, a move that nearly wiped out all its U.S. and Taiwan-based competitors.
At that time, Intel also began to expand its own PC motherboard lines, which caused fear -- and anger -- among Taiwan's suppliers. Luckily for Taiwan, Intel has somewhat retrenched from the motherboard business recently.
Intel, however, has not retrenched from its recent entry in the Fast Ethernet LAN card and controller businesses -- which compete directly with Taiwan -- the world's largest supplier of LAN cards.
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