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Wednesday, January 12, 2005
Lite-On IT, BenQ: OEM 16x DVD burners faced with cutthroat price competition from Samsung


Lite-On IT and BenQ are feeling the pressure on OEM prices for 16x DVD burners from Toshiba Samsung Storage Technology (TSST, represented by Samsung) with Samsung recently lowering retail prices of its 16x DVD burners by 30% to US$69 in the US and European markets, according to the optical disc drive (ODD) makers.

TSST has the competitive advantage of self-produced pick-up heads (PUHs) and chipsets and the design capability to minimize the production costs of DVD burners, the ODD makers indicated. Lite-On IT and BenQ do not yet possess the same level of ability to minimize costs, and are therefore unable to compete on the same level, the ODD makers pointed out.

Taiwan makers? OEM prices for 16x DVD burners have dropped to US$50 or even lower for large international clients such as Dell and Hewlett-Packard (HP), and to US$50-55 for large retail channels in the US and Europe. TSST?s cutthroat reduction in its retail prices is expected to force Taiwan-based makers to further lower their OEM price quotes, the ODD makers noted.

To cope with this threat, both Lite-On IT and BenQ will speed up the development of new models, the two companies said.

According to the Japan-based Techno Systems Research (TSR), Hitachi-LG Data Storage (HLDS), Lite-On IT, NEC, Pioneer and Philips BenQ Digital Storage (PBDS, represented by BenQ) were the world?s top five ODD producers in the third quarter of 2004.


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