U-Tech to set up optical disk plant in S. Korea

Taipei, Dec. 11, 2003 (CENS)--Taiwan's U-Tech Media Corp., a pre-recorded digital versatile disc (DVD) disk maker, recently announced plans to set up a plant in South Korea.

Industry sources said that U-Tech's new plant is designed to meet the requirement of the top-eight film makers in the United States. The Taiwan company plans to install eight production lines at the Korean facility to serve the American customers.

The sources added that U-Tech's new plant in South Korea is scheduled for completion by the end of next year and has been granted a 10-year commodity tax holiday by the South Korean government.

The sources said that more and more Taiwanese pre-recorded optical disk makers are planning to set up production facilities in South Korea, where there is a booming movie market in recent but the government levies high tariffs on imported optical disks. Infodisc Technology Co., Ltd. Was the first Taiwan company to set up an optical disk plant in South Korea. U-Tech, Infodisk's major rival, has been actively proceeding with the Korean facility project since it took over an Australia disk facility from its major shareholder Ritek Corp., the world's largest supplier in the line.

U-Tech is scheduled to set up the new plant in Chongju Province, South Korea. The province maintains a direct-transportation link with Taiwan and the Chongju government has promised to provide the needed land to U-Tech for the scheduled disk plant.

For the new plant in South Korea, U-Tech plans to raise the needed investment funds by issuing corporate bonds in the near future.

U-Tech reportedly has signed contract supply agreements with American film producers WAMO and MGM for next year's business. Industry observers said that U-Tech's new plant is designed to meet the big new orders.

U-Tech currently supplies pre-recorded optical disks to the top-eight film producers in the United States, industry sources said. But the firm's current capacity would fall short by over 40% if it begins supplying disks to also WAMO and MGM. So, the sources added, U-Tech's pre-recorded disk business is expected to grow by at least 40% next year.