CMC Magnetics, who plans to adjust its OEM quotes for blank CD-R and DVD+R/-R discs up by 10% on average in August according to a previous report, plans to further hike OEM prices in the fourth quarter of 2008.
The move is an attempt to significantly improve the profitability of optical disc production, according to company chairman Robert Wong.
The upward adjustment of OEM quotes in August will barely offset recent increases in production costs making it necessary to raise prices again in the fourth quarter, Wong emphasized.
This is because OEM quotes have continually fallen for the past two to three years due to price-cut competition from small makers in Taiwan and China, Wong pointed out.
CMC is currently evaluating the magnitude of the price increase needed for next quarter, Wong pointed out. CMC suffered a large operating loss during the first half of 2008 and may see a smaller loss in the second half, said Wong.
If the planned price hike next quarter is realized, CMC's operation could reach the breakeven point around the end of 2008 and begin to profit in 2009, Wong said.
For Blu-ray Discs (BDs), CMC is keeping an eye on the development of the market but is conservative about investment for the time being mainly because of royalty issues, Wong indicated. 2009 may a turning point in time for the BD market, Wong said.
Story source:
digitimes.com.
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