Sanyo Electric, Japan's third-largest consumer electronics maker, said on Monday it planned to more than double its output capacity of optical readers used in hot-selling DVD recorders in 2004/05.
The Osaka-based company said it would boost annual output capacity of DVD recorder pickups, which are selling well in step with rising demand for DVD recorders, to 35 million units in the business year starting in April from 15 million units this year.
"We've put a lot of energy into developing pickups and lasers for CD-ROMs, DVDs and now recordable DVDs," Sanyo President Yukinori Kuwano told a news conference. "Now we plan to significantly boost output."
Sanyo, the world's largest maker of optical pickups with a global market share of about 40 percent, is hoping to use its strength in key electronic components to secure an even bigger share of the booming market for consumer digital goods.
Kuwano said last week the firm would start selling DVD recorders later this year, entering a market in which larger rivals such as Matsushita Electric Industrial Co and Sony Corpare in fierce competition.
It plans to enter the U.S. market first and Kuwano said it was in talks with Wal-Mart Stores Inc about placing Sanyo-branded DVD recorders at the retailing giant's outlets.
Analysts say an own-branded DVD recorder is a natural evolution for Sanyo since it holds such a strong position in optical pickups. It expects sales of pickups to rise 28 percent to 148 billion yen ($1.39 billion) in 2003/04.
Sanyo said it planned capital expenditures of 13 billion yen ($121.9 million) on optical pickups in 2004/05 after spending nine billion yen on the business in 2003/04.
The company plans to boost its production capacity of all optical pickups, a key component in CD and DVD recorders and players, to 250 million units in 2004/05 after making an estimated 200 million units this business year.
In addition to pickups, it is a major producer of charge-coupled devices (CCDs), the image-capturing chips in digital cameras and camera cellphones, and is also the world's biggest manufacturer of rechargeable batteries.
Powered by strong demand for key devices, Sanyo aims to reach sales of three trillion yen in the business year ending March 2006 from revenue estimates of 2.45 trillion yen this business year.