The price cuts are mainly due to Chinese competitors dumping CD-R discs into the market and an oversupply of DVD-R discs, the makers indicated. The makers pointed out that there is no further room for CD-R prices to drop, and some less competitive makers can be expected to withdraw from the market.
However, quotations for 4x and 8x DVD-R discs may slip further, as second-tier and smaller makers with a technological advantage (i.e. higher yield rates) could reduce their gross margins to compete with first-tier makers such as CMC Magnetics, Ritek and Prodisc Technology. First-tier makers have mostly moved away from low-priced CD-R orders and are shifting their production focus to 16x DVD discs, the makers noted.