Emerging Vendors

October 21, 2009

Company: Zotac USA

Headquarters: City of Industry, Calif.

Technology Sector: Hardware

Key Product: Ionitix-A-Series Mini ITX Intel Motherboard

Year Founded: 2008

Number of Channel Partners: More than 20 system integrators, distributors and e-tailers in North America

Ideal Channel Partner: Custom systems builders

Why You Should Care: Zotac was the first components manufacturer to bring Nvidia Ion-based Mini ITX motherboards to the U.S. channel and continues to lead in the category.

The Lowdown: It's no secret that OEMs and components manufacturers have been slow to bring Nvidia Ion-based systems and building blocks to their channel partners. For one thing, Intel hasn't exactly made it easy for Ion, an integrated graphics platform for Intel Atom-based netbooks and nettops that vies with Intel's own graphics solutions for those product categories.

Ionitix-A-Series Mini ITX Intel Motherboard

Enter Zotac, a new motherboard player in the U.S. market with an established pedigree as a volume manufacturer of video cards. An offshoot of Hong Kong-based Zotac International, Zotac USA sprang onto the scene at the 2008 Consumer Electronics Show, leveraging its China-based manufacturing capacity to woo e-tailers, distributors and system integrators with a lineup of video cards, motherboards, mini PCs and accessories like the Zotac ZT-Nitro, an overclocking controller for Nvidia graphics products.

"A lot of people saw us come into the market, and thought, 'Oh, it's just another Asian hardware manufacturer. But we're trying to make a statement and trying to differentiate ourselves with our products," said Allen Wang, North America sales director for Zotac USA.

At CES nearly two years ago, the fledgling company quickly found an e-tail partner in NewEgg.com and has been growing its partner channel ever since, Wang said. More recently, Zotac was the first out of the gates with Ion-based nettop PC building blocks for the whitebox channel -- even as more established motherboard vendors took their time shipping such products.

Currently, Zotac and Asus are the only two vendors of note with Ion-based motherboards available to the channel. And Zotac remains the leader with four SKUs based on two Ion motherboard models for Mini ITX systems, Wang said, adding that a barebones netbook offering from Zotac would be coming soon.

But leading the way on Ion hasn't entirely been a walk in the park, admitted Wang. As the first manufacturer officially designated by Santa Clara, Calif.-based Nvidia as a supplier of Ion boards, Zotac had some trouble meeting orders early on.

"As soon as the announcement was made, phone calls were coming in from all over the place," Wang said. "Demand is stable now and [Ion] is selling very well, but we actually had an inventory shortfall for a couple months at first. But we've ramped production and recently we've been able to fill those back orders with no problem."

Ramping production isn't a problem for Zotac, Wang said, because the company is actually a spin-off of Hong Kong-based components giant PC Partner. That means Zotac has access to China-based manufacturing facilities that measure in the hundreds of thousands of square feet.

Though new to the motherboard market, Zotac has been encouraged by the growth of its channel -- particularly on the whitebox side, Wang said. The company counts well-known custom system builders Falcon Northwest and Vigor Gaming among its partners.