Monica Chen, Taipei; Joseph Tsai

 

Asustek Computer has recently reduced its motherboard production volume from 5-6 million units each quarter previously to only 3-3.5 million units in the first quarter of 2012 to help digest the company's inventory from the fourth quarter of 2011, according to sources from upstream component makers.

Asustek declined to comment on the news.

The sources noted that Asustek still had an inventory of about one million motherboards from the fourth quarter, although the issue will not affect the company's sales target of the first quarter of 2012, the company's upstream component partners may all be affected.

Asustek's production cut has also affected its chipset orders to CPU makers. The motherboard company's chipset orders to Intel in the quarter dropped 2.5-2.8 million units with orders to AMD dropped 500,000-700,000 units.

In the fourth quarter of 2011, despite most motherboard players focusing on reducing inventory to counter weakening demand, Asustek maintained its production volume, which piled up its inventory level; as a result, compared to Asustek, the other motherboard players are expected to enjoy on-quarter shipment growths from 5-10% in the first quarter.

In order to boost demand, Intel has already set to reduce its Sandy Bridge CPU prices and with hard drive prices also expected to recover gradually, motherboard players are mostly optimistic about demand in the first quarter of 2012.