On the other hand, some market observers contend that the CD-R market is nearing maturity and new applications with large demand for CD-R discs have not emerged. The rising popularity of new storage systems like DVD-R/RW and DVD/RAM drives this year, moreover, will slow CD-R disc demand.

As for CD-R manufacturing, the supply surpluses last year were attributed to Taiwanese and Hong Kong manufacturers' intensive equipment upgrading, and an inventory of more than one billion units prompted a substantial slump in prices. Taiwanese manufacturers produced 400 million CD-R discs per month last year, attaining a 70% capacity utilization rate. However, they will adjust their production this year to re-balance supply and demand.

The association predicts that Japan will account for 13% of global CD-R manufacturing in 2001, close to the proportion in 2000. If overseas Japanese ODMs (original design manufacturers) are taken into consideration, the proportion will reach 39%.