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Appeared on: Friday, February 20, 2004
Demand to rise for DVD burners

Taiwanese digital video disk (DVD) burner makers are expected to increase their global market share this year as the growing trend of burning downloaded online music and films to DVD is fueling demand, industry analysts said.

Global DVD-burner shipments are expected to nearly double to around 47.5 million units this year, up 90 percent from 25 million units shipped last year, the private market researcher Topology Research Institute estimated yesterday.

Increasing multimedia downloading from the Internet is driving up the demand for DVD burners, a Topology analyst said at a seminar in Taipei.

"More and more people download music and movies from the Internet, which in turn need a more powerful burner than a compact disk [CD] burner to burn to DVD," he said. The capacity of a DVD is about six to seven times that of a CD.

Analysts said the climbing demand for DVD burners will help double local companies' global market share from last year's 16 percent to 32 percent this year.

Lite-On will be the biggest beneficiary, said Lu Chia-lin, an analyst at Yuanta Core Pacific Securities.

Helped by large orders from US computer giants Dell Inc and Hewlett-Packard Co, Lite-On is expected to expand its global market share to around 10 percent this year, based on total shipments rising to 5 million units, Lu said.

Lite-On is also expected to outpace its local rivals by reporting a 20-percent growth in revenue this year which amounts to around NT$49.7 billion over last year.

Other local DVD-burner makers are expected to post only a 10-percent revenue increase, he said.

The earnings growth will be even faster at a 26-percent pace to about NT$5.55 billion, from NT$4.4 billion earned last year, he said.

However, Taiwanese companies are making slow progress in the home DVD recorder, or consumer-oriented, DVD recorder market, which is growing faster than the DVD burner market for personal computers, analysts said.

International Data Corp's (IDC) forecast indicated that global DVD-recorder shipments will more than double to 25.9 million units this year, from 12.4 million units shipped last year.

In addition to selling brand-name recorders into households, local companies also found it difficult to draw original equipment manufacturing (OEM) orders, Lu said.

"Japanese brands, which dominate the world's home DVD recorder market, are highly resistant to farming out production, as happened in other consumer electronics segments," Lu said.

Lite-On already started to produce home DVD recorders for unspecified US and European vendors, but the volume remains small at about 1 million units this year, Tsau said.

However, BenQ still seems to hold back extending into consumer-oriented DVD recorder area, he said.


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