CMC Magnetics, Taiwan's largest manufacturer of optical discs, is increasing production of 16x DVD+R discs.

Shipments are expected to rise from 10% of the total sales volume of DVD+R discs currently, to 30-40% in the fourth quarter of this year, according to company vice president and spokesperson Andria Wong.

Currently, 8x DVD+R discs account for 90% of the company's shipments of DVD+R discs, Wong indicated. As sales of 16x DVD burners increase, CMC expects growing shipments of 16x DVD+R discs, and with OEM quotations of US$0.80, 16x DVD+R discs have gross margins of 40-50%, much higher than the 30% margins and US$0.50-0.60 OEM price of 8x discs, Wong said.

The market popularity of an optical disc format usually lags the corresponding optical drive demand by one quarter, Wong noted. Wong predicted that 16x DVD burners will be the mainstream models in the fourth quarter of this year, so 16x DVD+R discs will become more popular in the first quarter of 2005.

Wong confirmed the report that the global supply of polycarbonate (PC) has decreased by about 20% mainly due to GE's reduction in output. The shortage has pushed up PC prices, but whether prices of CD-R and DVD discs will rise accordingly depends on next quarter's market conditions, Wong indicated.

In addition to 16x DVD+R discs, CMC has begun to ship 8.5GB DVD+R DL (single-sided double-layer) discs in small volumes at an OEM price of US$5, according to Wong.

From DigiTimes