CMC Magnetics is increasing the speed of their media in order to maintain a gross
margin of about 50%. In the last quarter of 2003, 90% of CMC's DVD±R media was
certified for 4x recording, with the remainder being 8x discs. Now,
following production expansion, the proportion
of 8x discs shipped will rise to 50% this month and over 80% by the end of this
quarter.
 The price of 8x discs stands at about US$ 1 while that of 4x
discs has dropped to US$ 0.70, according to Wong. CMC Magnetics plans to
upgrade the speed of its DVD-R/+R discs to 12x in the
third quarter and 16x in the fourth quarter, Wong said.
The higher margins available at higher speeds will offset the decreasing
profitability of DVD-R/+R discs at lower speeds, Wong explained.
While raising the speed, CMC Magnetics plans to expand its
monthly production capacity of DVD-R/+R discs to 60 million units by
year-end from 30 million now. However, actual expansion will depend on
market conditions, Wong said.
As other Taiwanese companies also plan to expand their
DVD-R/+R disc production capacities this year, the total full-year
capacity may exceed two billion discs, far more than projected 2004 global
demand for 1.6 billion to 1.8 billion discs, according to Wong. Thus,
Taiwanese makers are likely to face intense price competition this year,
she pointed out. |
Source: DigiTimes
