Taiwan's Gigabyte spins off server biz as wholly owned subsidiary

Consumer motherboard tech will reside in unit that's left behind

Taiwanese OEM Gigabyte has split itself in two, spinning off its enterprise solutions business as an independent but wholly owned subsidiary that will focus on the development and sale of servers and server motherboards, while Gigabyte will continue to manufacture consumer motherboards and other technology.

According to Gigabyte, the new subsidiary will operate under the name of Giga Computing Technology, but reckons it will build on the Gigabyte brand to “drive server business growth and innovation”.

As a result of the split, Gigabyte picks up 83,360,000 common shares of Giga Computing at NT$10 per share, based on the estimated value of its enterprise subsidiary at NT$833,600,000 ($27.2 million).

The company appears to be keen to reassure customers that despite the move, it will be business as usual, saying that Gigabyte and Giga Computing have an agreement to maintain the same development and support for all current Gigabyte enterprise products and solutions.

In fact, the systems and products sold by Giga Computing will, at least for the short term, continue to bear the familiar Gigabyte brand, while Gigabyte said it will seek to drive its own growth in consumer motherboards, GPUs, laptops, desktops, monitors, and other PC components.

The CEO of newly formed Giga Computing Daniel Hou said in a statement that this spin-off is part of Gigabyte's long term plans to respond faster to market forces and to better tailor products to various markets.

"Although we go by a different name, we will continue operations as we always have, and our customers will continue the same relationships and have high expectations from our well-established server business unit that offers a diverse product portfolio," Hou said.

Gigabyte claimed the split would allow the two companies to focus more on their core markets, and develop distinct identities for consumer and enterprise products while enabling them to allocate capital and resources with greater efficiency. This, at least, is the plan.

However, while a split into separate companies focused on enterprise and consumer markets may make business sense, the creation of such a wholly owned subsidiary is often the prelude to selling off that part of the business. Gigabyte claims that the move is "simply a group reorganization" and will not have an impact on the daily and financial operations of the parent company.

Gigabyte is perhaps best known for its motherboards, but its enterprise business offers a range of datacenter kit including servers configured for HPC, storage and AI, as well as liquid cooling technologies. Last year, the company introduced a line of Arm-based servers based on Ampere's Altra or Altra Max processors paired with Nvidia GPUs, aimed at workloads such as AI and HPC. ®