10.12.2001
VIA adopts own brand for P4X266 motherboard

• VIA is getting aggressive in promoting P4X266. The latest strategy is to adopt VIA’s brand name on motherboards (MB) made by 1st-tier MB manufacturers which utilize Intel chipsets, to be sold at a discount in markets like China. We believe this is a short-term patchwork measure, as it involves three potential problem areas: (1) responsibility for quality control on the VIA brand is not easily defined; (2) VIA branding will pose a threat to MB customers; and (3) VIA’s discounting strategy will undercut 1st and 2nd tier MB makers. Thus, we believe volume ramp on VIA’s MB going forward is unlikely. Worse, with competition increasing and end market demand continuing weak (Intel will roll out its 845D chipset, and SiS (2363.TT) and ALi (5393.TT) will make P4 solutions for shipment this year), VIA may see little turnaround opportunity before 2H02. Despite recent share price slumps, we are bearish on the company’s share performance in the near-term.