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Tuesday, July 02, 2002
 Interview with Oak chairman: Stepping up for the DVD market
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Message Text: DigiTimes performed an interview with OAK's chairman "...Already successful in such products as CD-ROM and DVD-ROM chips, leading optical storage chip maker Oak Technology is actively stepping up its moves in the DVD-rewritable market in preparation for next year’s boom. In an interview with Oak chairman Young K. Sohn, he predicts that the DVD-recordable and the slim-type combo drive will launch single chips next year..."

Q: What is your view on the outlook for the optical storage market?

A: The popularization of digital cameras, digital video recorders, DVD-RWs, various portable devices and other digital media and IAs (information appliances) is the main force driving the continual growth of the optical storage market. Demand for optical storage products is expected to grow from 18 million units in 2000 to 96 million units by 2004. The digital multimedia market is expected to boost demand for rewritable media from three million units in 2000 to 31 million units by 2004.

Despite the PC market’s tendency towards high saturation beginning the second half of 2000, its high penetration rate causes optical storage shipments to far outweigh PC shipments. In the future, optical storage growth will be driven by non-PC applications.

Q: What do you see as the main trends of the optical storage market for this year and next year?

A: For PCs and notebook computers, the integration of CD-RW and DVD rewritable devices will be the newest trend for the second half of this year, and it will enter a period of high growth. International Data Corporation (IDC) estimates combo drive sales will grow at a 58.1% CAGR (compounded annual growth rate) from 2000 to 2005, while notebook-use combo drives are expected to rocket from 322,000 units in 2000 to 28 million units by 2004 for a CAGR of around 206%.

The current market is verifying these predictions. CD-RW will come into maturity as its speed reaches 48x in the second half of this year, coinciding with the anticipated boom in notebook DVD-ROMs and CD-RW combo drives in the second half of this year. Reasons behind this growth include: notebook computer shipments have grown 50% from last year, and DVD-ROM licensing fees are expected to decrease for use in notebooks, plus the cost difference between notebooks computers with slim-type combo drives and those with DVD-ROMs has come within acceptable standards for systems vendors. So, the combo drive market, particularly the slim-type combo drive market, is expected to take off this year.

DVD-recordables are expected to show explosive growth starting next year, mainly because DVD-recordable prices in the current consumer market have dropped to US$299 per unit, and may slide further to US$199 in the near future, becoming affordable for the average consumer. Currently, you can already find 2x DVD-RW drives and DVD+RW drives, and the next-generation 4x slim-type DVD drive will be out on the market in the third quarter. As OEM prices drop to US$150 in the second half of next year and US$100 by early 2004, the boom in DVD drives next year is foreseeable.

Q: What is Oak’s strategy and roadmap in the DVD-rewritable market?

A: The company held a 31% market share in CD-RW drive chips and a 28% market share in slim-type combo drives market in the first quarter. DVD-ROM chips in the mainstream have speeds of 16x, expected to reach 48x in the second half of this year, and have already begun shipments. To remain leading, Oak is actively developing integrated products, with DVD-RW chips being integrated from 10 units to three units. Slim-combo drive chips are also heading towards single chips. The integration solutions for these two products are expected to be officially rolled out next year.
 
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