Global motherboard (MB) shipment should slide by 12.6% on quarter at 37.3mn units in 1Q06 amid the cyclical shipment downturn and the shipment peak that recorded in the previous quarter. Demand for Europe remains sluggish in this quarter and the poor weather also discourages consumers to go shopping. The ease of previous chipset shortage has also boost makers to compete on shipment in the previous quarter, thus builds up the inventories among players and limits shipment in 1Q06.

In terms of regional shipment, Asia should still lead the growth among all other regions with enterprises and education institutions at China serve as main growth drivers. The upcoming week-long in early May, should also spur another wave of demand as players are all pre-stocking their inventories and prolong MB shipment to late March and early April. Mature markets like Europe and the US, however, should encounter shipment setback in 1Q06 and distribution channels should suffer the hardest pressures at a 15-20% sequential drop. Branded MB shipments should manage with a drop of 10% amid the stable demand from enterprises.

Average selling prices (ASPs) should still stick to its downward trend in 1Q06 with an anticipated drop of 5-10% at channels, which interprets revenues drop among MB makers. In addition to the mentioned cyclical downturn, the upcoming CPU transition for AMD in 2Q, as well as the embargo of lead-base MBs in 3Q, prompt MB makers slash prices to spur the last wave of demand for existing goods.

MB shipment should remain dismal in 2Q06 and drop by a further 9.6% at 337mn units. After experiencing the shipment lows in February amid the lesser working days, most MB makers observe shipment growth in March. Overall speaking, demand from Europe should still disappoint MB makers and the anticipated growth momentum failed to grow demand at the previous CeBIT.

The trend of platform transition is blur in 2Q amid industry players' upcoming product launches. Consumers will hold their consumption only along with the availability of new products. Consumers should see the arrival of new AMD CPU, AM2, in April and related MBs should also available in June. Intel¡¦s new chipset series, 965 and 946, that slated to launch in 3Q06 should also put demand on hold.

Intel also places pressures on global MB shipment in 2Q as shipments of its low-priced 865-series chipsets materialized in March, which interprets minimal impacts over shipment in 1Q but challenges on MB makers' deployment in 2Q. MB makers should take more cautious measures on their product deployment and sales forecast for 2Q06 as the AMD/Intel platform transition and the lead-free regulations that effective in 3Q, should jointly step brakes on rapid shipment growth, especially when 2Q is the traditional low season. Although only Europe regions will introduce lead-free regulations, MB makes should migrate production to lead-free materials at other regions under the production effectiveness concern.

By: DocMemory
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