China-Taiwan JV creates top-tier motherboard company

In a deal that ties together China's largest PC manufacturer with one of the largest Taiwanese motherboard makers, Legend Holdings and Gigabyte Technology have announced plans to create a joint-venture company that will become one of the world's largest motherboard manufacturers.

The joint venture, which has yet to be named, will combine the two companies' existing motherboard production facilities in the southern Chinese cities of Huiyang and Dongguan, said Alice Li, a spokeswoman for Legend. These facilities will give the joint-venture company a total of 17 production lines with an annual production capacity of 9 million motherboards, she said.

Total investment in the joint venture amounts to HK$250 million (US$32 million), primarily from the injection of assets into the new company, Li said. Ownership will be split between Legend and Gigabyte, with each company holding a 50 per cent stake in the joint venture, she said.

Taiwan-based Gigabyte, already one of the world's largest motherboard makers, had an annual production capacity of 15 million motherboards prior to the deal with Legend, Gigabyte said in a statement.

As a result of the deal, Gigabyte will transfer its entire Chinese production capacity, nine production lines capable of producing 5 million boards annually, to the joint venture, Gigabyte said. Gigabyte will continue to own and operate its motherboard production facilities outside China, which are located in Taiwan and have an annual production capacity of 10 million motherboards, it said.

Legend currently operates eight motherboard production lines in China, with an annual capacity of 4 million motherboards, which will be transferred to the joint venture, according to Legend.