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Tuesday, May 28, 2002
June CD-R contract price increases boost hopes for better margins

Taiwan’s optical disc manufacturers are rolling out long-anticipated price increases in CD-R discs. Per-unit contract prices of blank discs for June are up by roughly US$0.02 at top-tier manufacturers, while those at the small-to-medium disc makers average US$0.015.

First-tier companies Ritek, CMC Magnetics and Prodisc Technology, which focus on high-speed disc products, have marked up June contract prices by US$0.02 to US$0.025, or a 5-10% rise. Unit quotes for their 40x and 48x CD-R discs currently range from US$0.18 to US$0.22

The US$0.015 per-unit increase at smaller disc manufacturers also amounts to 10% on the lower price baseline of 24x and 32x CD-R discs by those manufacturers. CD-R discs of 24x and 32x speed are quoted at around US$0.14-0.15.

The price adjustments are being made amid rising prices of polycarbonate, the key plastic material used in CD-R substrate. However, industry sources said they also reflect the higher price points of high-speed discs, which are becoming the industry standard as major disc makers convert their lines to produce 48x discs.

The disc price increases, plus improved capacity utilization to 80% to 90% that most disc makers are seeing, are boosting hopes of a gradual upturn in profit margins in the coming quarters.

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