Taiwan currently prohibits local makers from undertaking OEM production of pornographic pre-recorded discs for exports, although some makers have illicitly done so in small volumes, according to local industry sources. However, the government is expected to lift the ban next quarter, rousing a large influx of OEM orders from abroad to major producers of pre-recorded discs in Taiwan because Taiwanese makers are more competitive in quality than fellow makers in China and Hong Kong, the source indicated. Such OEM orders are valued at an estimated NT$3.0-4.0 billion a year, the source said.
Many of small and medium-sized manufacturers of blank optical discs in Taiwan are expected to shift their production lines of CD-R and/or DVD+R/-R discs to making pre-recorded pornographic discs, and aggravate an already expected third quarter DVD+R/-R disc shortfall, according to the sources.
Because existing production capacities are short of order volumes, these major producers have to subcontract part of their production to small and medium-sized makers of blank optical discs, the sources added.
These local small and medium-sized makers can only produce less profitable CD-R or low-speed DVD+R/-R discs due to technological barriers and insufficient funds. The average gross margin of 20% for subcontracted production of pornographic pre-recorded discs is much higher than that for blank optical discs, motivating them to shift production lines, the sources pointed out.
The shift will decrease Taiwan's total output of DVD+R/-R discs, therefore further tightening the global supply next quarter, claimed the sources. CMC Magnetics, Ritek and other leading makers of DVD+R/-R discs in Taiwan are expected to benefit from the situation.
Story source:
digitimes.com.
Comments