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Wednesday, February 20, 2002
Taiwan: Domestic material sources lower CD-R production costs


Thanks to continued domestic development of upstream materials, Taiwan’s CD-R disc sector has been able to reduce production costs in a big way. First-tier manufacturers like Ritek, CMC Magnetics and Prodisc are now producing certain types of CD-R discs for as little as US$0.10. Second-tier Lead Data, Gigastorage, Princo, Acer Media and Digital Storage Technology have pushed CD-R production costs down to US$0.11-0.12. This is already lower than the US$0.13-0.14 average in the second half of 2001.

Breaking down the cost of raw materials for CD-R discs, PC (polycarbonate) accounts for about 70% and dye 15-20%.

Most of Taiwan’s CD-R disc factories still purchase their PC from suppliers such as Bayer, General Electric (GE) and Mitsubishi. In the past two years, Formosa Plastics and Formosa Chemical & Fiber have both developed PC materials, but large-scale CD-R manufacturers have stopped at trial usage, as major overseas customers demand higher quality materials from the companies mentioned above. However, small-scale concerns with own-brand CD-R discs (offered at low prices) have begun to pick up PC materials from Formosa Group.

Ritek, CMC Magnetics, Prodisc and Lead Data developed their own dye materials early on, replacing supply from Ciba Specialty Chemicals and Toyo Ink Manufacturing. Silver CD-R discs still require dye from overseas sources, but almost all light-blue discs are now dyed with raw materials made in Taiwan – sold for 10-20% less than that of overseas competitors.

Ritek, Lead Data and Eternal have all developed their own lacquers, which are used on a large volume of domestically produced CD-R discs.


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