Taiwanese CD-R Prices Set for 'Modest' Price Rise in 2004

The prices for CD-R discs will rise moderately to US$0.20-0.25 (12p-15p) in 2004, compared with US$0.20-0.22 (12p-13p) currently, according to sources at leading Taiwan-based suppliers.

CD-R discs were priced at lows of US$0.11-0.12 (6.5p-7p) earlier this year and then shot up more than 80% to the current levels in the fourth quarter due to a surge in global demand, sources said.

The sharp price hikes are unlikely to be repeated next year now that global demand has stabilized and most of Taiwan's CD-R disc makers have suspended capacity expansion for CD-R discs. Instead, they have been focusing on expanding production of DVD+R and DVD-R discs, sources said.

The unit price of around US$0.20 (12p) for CD-R discs will enable makers to generate a gross margin of about 30%, which should be sufficient to keep makers from raising their prices further, they said.

A recent ruling by the US International Trade Commission (ITC) against a request from Royal Philips Electronics to block imports of CD-R discs from Taiwan will also help stabilize CD-R prices in coming months.

The ruling offers an opportunity for Taiwanese manufacturers to bargain with Philips for a lower royalty payment on use of its patented CD-R manufacturing technology, sources said.

Sources also pointed out that the leading Indian CD-R maker, Moser Baer India (MBI), which launched a cut-throat competition to win orders in the third quarter of this year, is now offering prices comparable to those quoted by Taiwanese makers.

According to the Japanese research firm Fujiwara-Rothchild, global demand for CD-R discs will reach 11.87 billion units in 2004, up 12.8% from the 10.52 billion units projected for this year, sources said.

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Fuji Latest To Predict Increased CD-R Prices.
Moser Baer Put 10% on CD-R Prices.
Memorex to Bump Up CD-R Prices.

Story source: digitimes.com.