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Thursday, December 18, 2003
Sony to stop DVD burner production and release OEM orders to Taiwan

Sony, one of the world’s top three manufacturers of DVD burners, will phase out production of DVD burners beginning with 8x models and instead seek OEM production in Taiwan, according to Taiwanese makers of optical disc drives.

Sony, Pioneer, NEC, and Toshiba as well as South Korean makers dominated the global production of DVD burners early this year. Several Taiwanese companies, including Lite-On IT, BenQ, Quanta Storage, Behavior Tech Computer, Asustek Computer and Accesstek, entered the market beginning in the second quarter.

The participation by Taiwanese makers has resulted in price competition, causing a drop in OEM prices of DVD Dual burners from US$170-180 per unit to US$120-130 currently, Taiwanese makers indicated. The OEM prices of DVD+RW models have even fallen to below US$100.

Under the price pressure, Sony has decided to halt its production of 8x DVD burners and models of higher speeds and then place OEM orders with Taiwanese companies. Lite-On IT, due to its close relationship with Sony, is the most likely to be Sony’s partner, Taiwanese makers pointed out.

Lite-On IT expects to deliver five million to six million DVD burners of various types this year, soaring from the one million units shipped last year, according to the company’s Optical Disc Business general manager Michael Gong.

According to Japan-based Techno Systems Research (TSR), NEC, Pioneer, Sony and Toshiba were the world’s top four suppliers of DVD burners during the first three quarters of this year, recording respective global market shares of 25%, 19%, 13% and 10%.

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