CMC Magnetics negotiates with Philips

Thursday, May 10, 2001

CMC Magnetics negotiates with Philips

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"...The negotiation with Philips for a better royalty rate continues after CMC Magnetic Corp. signed a new CD-R licensing agreement with Philips of Netherlands. Philips and CMC achieved a new rate for all CD-R production in 2001.The final agreement reduces the royalty rate from US$0.045 to US$0.035 per disc.

The agreement was made due to the difficult nature of the business further to prepare for price adjustment due to licensing fee.After several rounds of serious discussions,both companies agreed to a two-year buffer period. Under the new term, the royalty rate is reduced to US$0.035 per disc in 2001.It will be adjusted to US$0.04 per disc in 2002 and to the normal US$0.045 per disc in 2003..."