Demand for desktop PC motherboards "is falling off a cliff" in late October as users put off purchases until the Windows Vista OS (operating system) launches in January, according to investment banking firm Goldman Sachs.
Motherboard orders for the clone or white-box desktop PC market has slid nearly 20 per cent from its early October peak.
"Motherboard demand weakness is in line with our view that Vista has a negative impact on [fourth-quarter] motherboard demand, but it happened earlier and more significantly than we expected," said Henry King, executive director of technology research for Goldman Sachs (Asia), in Taipei, in a report on Saturday.
He also blamed a scarcity of low-cost Intel microprocessors and AMD AM2 processors for the drop in demand, since it means there are fewer low-cost PCs on the market. Demand for low-cost PCs remains strong.
Rising user demand for laptop computers is also pushing demand for desktop motherboards down, he said.
As motherboards and other desktop PC components pile up at the end of October and in November, King believes companies will start a price war to clear their inventories.