The major players in the CD-R disc industry, such as Ritek and Prodisc are upgrading their
CD-R production lines to DVD-R production lines:
Many companies had expanded CD-R disc capacity in the second half of 2001 to meet demand. However, over-expansion has brought average utilization rates down to around 60% or 70%. Meanwhile, DVD-R disc demand is expected to grow quickly in the second half of 2002. |
To upgrade a CD-R disc line, manufacturers can add a bonding machine from Pioneer for NT$11 million to NT$12 million or from other suppliers for as little as NT$4 million. Including other costs such as dye, DVD-R molds and electrical testing equipment, the upgrade could cost NT$14 million to NT$15 million.
In contrast, a new DVD-R disc production line from Pioneer, including two injection molding machines and processing know-how, would cost about NT$70 million.
According to sources, upgrading a CD-R line '“ from placing the order, installing equipment, to achieving sufficient yield '“ takes about one business quarter. An upgraded line with 75% yield can maintain about a 50% gross margin.
As we reported ealier today also LG has started a DVD-R production line.
Source: Digitimes.com
