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Wednesday, May 18, 2005
CMC Magnetics: OEM prices of DVD+R/-R discs to further rise next quarter

The increased demand for DVD+R/-R discs has resulted in an increase in OEM prices by 10%-15% in total for this quarter.

This is expected to further push up prices in the third quarter when it will begin to climb on a monthly basis rather than per quarter as it is currently, said CMC Magnetics chairman Robert Wong.

CMC is currently enjoying booming business, with the volume of received orders 20% in excess of production capacity, Wong indicated. The company expects its operation to turn from an operating loss last quarter to a profit this quarter and steadily increase profitability through next quarter, Wong noted.

In view of growing demand for DVD+R/-R discs, many makers of optical discs in Taiwan are transforming or are planning to transform CD-R production lines into lines for making DVD discs. The capacity expansion will not substantially affect this year's global market of DVD+R/-R discs, Wong pointed out. This is because the transformation will result in lower production capacity, for example, from 100 million CD-R discs originally to only 30-40 million DVD+R/-R discs, Wong explained.

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