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Royal Philips Electronics of the Netherlands, and BenQ Corporation of Taiwan (formerly Acer Communications & Multimedia Inc.), today announced the signing of a memorandum of understanding to cooperate in the development of next generation optical storage data drives for the PC industry. This agreement, building on an existing supplier relationship, is expected to give both companies a significant time-to-market advantage in optical storage products, initially focusing on DVD+RW drives for the data market.

The deal allows both companies to play upon their key strengths in optical storage technology. Philips will focus on developing the latest innovations in optical storage solutions, bringing new storage concepts to market based around flexible architectures and setting industry standards in the early technology phase, whilst BenQ will use its expertise to deliver speed improvements as the technology becomes more mature. Success in the laser optics market is determined not only at the introduction of an innovative new standard, such as DVD+RW, but subsequently by the fast introduction of “cost down and speed-up” versions, known as the “speed race”. Together Philips and BenQ present an ideal combination of innovation and the required expertise for the speed race.

The joint agreement will see the establishment of a dedicated design house, focused on developing turnkey drive designs, using Philips’ state of the art reference designs, chipsets, OPU’s and other components, for next generations of the DVD+RW data product family with increased performance, such as write and read speeds, ahead of the market. The resulting products will then be ready for mass production in the respective Philips and BenQ factories, and independently marketed and sold by both companies.

Commenting on the deal, Arthur van der Poel, member of Philips’ Board of Management said: “This deal is a reflection of the importance we place on innovation and speed in Storage, one of our stated technology focus areas, alongside Displays, Connectivity, and digital video processing. As a result of broadband and digital imaging, consumers are demanding compatible, higher storage capacities at faster speeds of access and creation – Philips is ideally placed to set industry-accepted standards and provide the technology solutions to meet this demand. The deal again demonstrates the benefits we can deliver through strategic partnerships, allowing Philips to focus on what we do best, and using that knowledge with an ideal partner to bring our technologies to market first. Together, we are confident of being a leader in the speed race in optical storage.”

DVD+RW is a standard for recording data and video on optical discs backed by a variety of vendors including Philips, Dell Computer Corp. and Thomson Multimedia SA. It faces competition from another format, the DVD-RW standard, which is being pushed by the DVD Forum and vendors including Pioneer Corp.

The alliance will see the creation of a dedicated design house, providing blueprints for optical storage products to be manufactured in Benq and Philips facilities. Philips forecasts that the optical storage sector will be a US$15 billion industry by 2005. The first DVD+R/+RW products from the new partnership are expected in the course of 2003, following a Philips launch of these products in 2002.