Lite-On IT to cut back DVD-ROM drive shipments next year

Lite-On IT will ship less DVD-ROM drives next year. Due to the high licensing fees, profits have become very small. This is the problem when you combine excellent quality with the lowest prices. They hope to replace them with more expensive combo drives. Read the article at DigiTimes.

Licensing fees for DVD-ROM drive technology costs about US$10 per unit, about one-third of a drive's manufacturing contract price. If Taiwan-based companies cannot solve this issue, they will not be able to sustain profitable operations when DVD-ROM drive prices fall further, said Michael Gong, general manager of Lite-On IT's optical disc drive business unit.

The company plans to ship more higher-margin CD-RW/DVD-ROM combo drives and cut DVD-ROM drive shipments back by 3-5% next year. It expects to ship 40 million optical storage drives in total, of which 15 million units will be CD-ROM drives, 10 million CD-RW drives, six million combo drives, six million to 6.8 million DVD-ROM drives and three million other products. Lite-On expects its DVD-ROM drive shipments to include about two million half-high type drives and four million slim-type drives.

Source: DigiTimes