Expecting a flourishing home video market, Taiwan-based Infodisc Technology will expand its monthly DVD disc production capacity by roughly 50%, from 15 million units to between 22 million and 25 million units in 2003, said company chairman David Lu.
The company, citing demand from its major clients, will expand production capacity in plants in Toronto and South Korea. The company will also purchase machinery to produce higher storage capacity discs such as the DVD-14 and DVD-18.
Lu said the quote price for DVD-9 discs is double that of DVD-5 discs. However, the production cost of a DVD-9 disc is only US$0.20-0.30 more than that of a DVD-5. Both formats use similar production technology with about the same yield rate.
The unit price of a DVD player has slid from US$99 to US$69, and even to as low as US$49 per unit in North America, said Lu, raising demand for DVD discs.
Citing the high worldwide penetration rate of DVD players, moviemakers and distributors in recent years have been increasing their advertising budgets for the home video market. For example, “Spiderman,” distributed by Sony Pictures Entertainment, has sold 20 million DVD copies as the result of intensive marketing, and had once been in short supply, said Lu.
The company expects high seasonal revenues in the first quarter of next year, thanks to hit movies from its clients, such as “The Lord of Rings: The Two Towers,” “Die Another Day” and “Harry Potter and the Chamber of Secrets.” Orders from these films are expected to come in January as their DVD versions will be available on the market after May 2003, according to Lu. The company expects to ship at least 30 million DVD discs on these orders, he added.