Intel to release ODM motherboard orders to Foxconn

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Intel to release ODM motherboard orders to Foxconn, say Taiwan makers

Intel will release ODM orders in place of OEM orders for the first time to Taiwan motherboard makers, with such orders initially being placed with Foxconn Electronics (Hon Hai Precision Industry) only, according to industry sources in Taiwan.

Intel declined to comment on industry speculation, but said it continues to design and develop motherboards and closely cooperates with industry players in the field, making the best use of the overall resources to meet market needs.

The move is meant to help Intel save R&D costs for its own-brand motherboards, which currently have annual shipments of around 4-5 million units, the sources noted.

However, based on a comment from Intel, the company will not stop designing motherboards. Intel continues to design and develop motherboards and closely cooperates with industry players in this field, making the best use of the overall resources to meet the respective market needs, Intel said in response to the report, while adding that it does not comment on industry speculation.

Pegatron Technology, another Intel OEM partner for motherboards, will not be included in the new orders, the sources stated. In addition, Pegatron's major client Asustek Computer is increasing its outsourcing ratio to others maker to save costs, so Pegatron's motherboard shipments in 2009 may drop 25-30% compared to 2008, the sources noted. Pegatron declined to comment on the news.

The sources added that 2-3 second-tier motherboard makers may quit the market by the end of this year.

Source -digitimes

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Hard times for even the biggest it seems then; still Foxconn must be pleased.