Philips is planning to reduce its CD-R royalty charge from US$0.045 to US$0.035 per disc, according to the company?s web site
However, Taiwan producers of optical discs have not responded favorably to the decrease in royalty charges since it is smaller than they expected.
The decrease of only US$0.01 in Philips? royalty charge is too small to cover the recent drops in the makers? gross margins due to rising prices for the key component polycarbonate (PC), coupled with falling CD-R disc prices, the Taiwan makers noted.
They were hoping that the CD-R royalty payment would be based on a percentage of their revenues rather than a fixed rate charge since a sliding rate would take into account price fluctuations in the market.