Lite-On IT is currently the largest manufacturer of optical disc drives in Taiwan and expects to deliver 50 million various types of ODDs this year, growing 13.6% from the 44 million units shipped in 2004, according to company president Danny Liao.

Thanks to the decreasing cost of components, Lite-On IT?s average gross margin rose from 17.3% in the fourth quarter of last year to 18% last quarter, Liao indicated. As the average OEM price for DVD burners is expected to fall from the current level of US$45-50, the average gross margin and profitability for this quarter will drop from last quarter, Liao noted.

The drop in OEM prices will force Japanese brands to decrease own production to minimize production costs, which is favorable to Lite-On IT and South Korean OEM makers, Liao pointed out.

While continuing to specialize in ODM/OEM production, Lite-On IT will also expand to other product lines through strategic alliances or mergers, Liao noted. However, the company has no immediate plans to merge with any local second-tier ODD makers, Liao added.

From DigiTimes