As the popularity of recordable DVD media increases due to more DVD writers and standalone recorders being sold, CMC Magnetics has announced that they will start shifting some of its blank CD-R production capacity to blank DVD±R production. At the moment, their DVD±R production capacity is 72 million discs per month, however they aim to increase this to 80 million in September and 90 million by the year end. However as there is still demand for CD-R discs, CMC will not cease its CD-R production.
Although increased production normally means lower prices, unfortunately due to the persistent cost of buying in polycarbonate (PC) material as well as rising demand of blank DVD media, CMC plans to up its pricing on blank DVD±R discs by 10% this quarter.
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The company's current DVD+R/-R production capacity is about 72 million discs, Wong pointed out. The average gross margin for DVD+R/-R discs is better than 20%, whereas the company is barely breaking even on production of CD-R discs, Wong indicated. However, CMC does not plan to cease production of CD-R discs, as demand still exists, Wong noted. Due to increasing demand and persistent high procurement cost of polycarbonate (PC), CMC also plans to increase its prices for DVD+R/-R discs this quarter by an average of 10%, Wong indicated. |
Although the demand for blank DVD±R keeps on increasing, I could not see the demand for CD-R media decreasing that quickly, especially since consumers still write music CDs as well as backup content to CD-R, where the capacity of DVD would be overkill for the amount that needs to be backed up.
Source: DigiTimes
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