Motherboard market begins to sizzle

NEW DELHI: The coming months may soon witness intense competition among local

manufacturers and importers in the motherboard market. But what makes it

noteworthy is the sea of change in the type of players in this sector.

This is way different from what it was nearly three years, when the Indian

market was the sole monopoly of importers. But with the scenario undergoing a

change and local manufacturers adopting aggressive market strategy, importers

and manufacturers now look upon each other as prospective competitors.

Vintron Informatics Ltd, one of the Indian manufacturer has doubled its

motherboard manufacturing capacity to 500,000 by adding another assembly line at

an investment of Rs 10 crore, last year. With this, Vintron total output

accounts for nearly 1,350 boards, per day and 40,000 boards per month.

Meanwhile, Cerebra Integrated Technologies Ltd has unveiled its Surface Mount

Technology (SMT) division, which will manufacture motherboards, graphic cards,

memory modules, monitors and CD ROM drives. XO Infotech Ltd, another IT solution

and electronics services provider and manufacturer of motherboards, is planning

to pump Rs 5 crore to set up its third SMT line in India.

With the new SMT line in place, the company plans to double its existing

capacity of the plant to 90,000 from the current 45,000 per month.

But, does these statistics mean that motherboard manufacturing has come of

age in India? Will it be able to combat the cutthroat competition from the

importers who have been dominating the market and was enjoying a much larger

mind-share among the partners?

Yes, say local manufacturers, who claim that they have an edge over the

importers, in terms of regular supply of shipments. They say that logistics too

are being taken care of. "One of the advantages of local manufacturing is

that the logistics are very easy to handle and thus the cycle is very short.

Dealers don't have to carry lot of inventory unlike importers," says

Vintron Informatics Ltd. director (marketing) Manish Agrawal.

This apart, local manufacturers claim that importers do not have necessary

infrastructure and knowledge to provide the necessary technical support. They

also lack consistency in supply, added Agrawal.

However, importers argue that putting up more SMT lines doesn't mean that the

product will be good. "It will still take quite some time for local

motherboard manufacturers to build trust among the public. The inherent flaw is

that local manufacturer’s do not have R&D facilities. They just import the

readymade design and assemble it here," said Jorjy International CEO AK

Sapru. Computer Force CEO Satish Sharma agrees, "Motherboard manufacturing

in India is a new concept. The infrastructure is insufficient and technical

expertise is also scarce here."

Manufacturers, moreover, feel that importers have an edge over them only in

terms of duty structure. This is due to the fact that duty on finished

motherboard is lower than duty on its components. "This is a threat to not

only motherboard manufacturers but the entire manufacturing industry in

India," said XO Infotech Ltd (vice president) Sanjay Shakdher.

However, problems regarding warranty period continues to dog both the

manufacturers and importers. With consumer in India becoming more aware of their

rights, vendors are setting up better service infrastructure to cater to the

customers needs. Some importers have also extended their warranty period from

one to two years now. "This is the first time that any motherboard importer

is extending a warranty up to two years," said Sapru.