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CD-R prices up in June


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CMC Magnetics, in light of a tight global supply for CD-R discs, plans to raise its OEM quotes for CD-R discs by 5-10% in June, according to company chairman Robert Wong.


As second-tier makers in Taiwan and smaller makers in China have given up production of CD-R discs due to intense competition and leading Taiwanese makers switch CD-R production capacity to making DVD discs, the global supply of CD-R discs is 20% short of demand this quarter, Wong indicated. The gap may expand to 30% next quarter and if so, CMC may further raise its quotes by another 5-10%, Wong noted.


The shortage in CD-R discs is due in part to the production capacity of Chinese makers being booked until the fourth quarter of this year. Though retail channel clients usually prefer the cheaper, lower-quality discs produced by the China-based makers, they must rely on Taiwan-based makers, who in general produce higher quality discs, to fill in the deficit, the sources indicated.


Gigastorage, a second-tier maker of optical discs in Taiwan, will immediately benefit from the shortage because the company's production is mainly for the retail channel, while CMC and Ritek, who focus on OEM production, may see benefits in the third quarter of this year, the sources pointed out.



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