CD-R disc makers post declines in first-half earnings

Mr. Belvedere used our newssubmit to tell us that CD-R disc makers are facing a serious decrease in profit. CD-R prices are very low at the moment due to heavy competition.

Taiwan's major CD-R disc makers all reported sharp declines in first-half net profit from a year ago, hurt by slumping disc prices. Meanwhile, the future direction of CD-R prices remains unclear, as manufacturers take a wait-and-see attitude before rivals make pricing moves.

Ritek, Lead Data and GigaStorage posted losses in the first half due to narrowing margins and foreign-exchange losses, despite up to 30% revenue growth year-on-year during that period.

CMC Magnetics and Prodisc Technology have fared relatively well, but both saw a severe downturn in earnings. CMC's first-half net profit slid 75% year-on-year while Prodisc's fell 55%. They didn't give financial projections for the year.

We all like these low prices. Yesterday I saw 100 CD-R's in jewelcases for 30 EURO. It is impossible to make a lot of profit on such low prices. The CD-R prices have dropped every year. Maybe this is a turning point and prices will rise again? For those interested, take a look at the complete report here.

Source: DigiTimes