Hon Hai Reportedly Wins Slim-Type DVD Drive Order from Matsushita

Taipei, March 22, 2009 (CENS)-Matsushita of Japan (Panasonic) reportedly placed orders for slim-type DVD drives to Taiwan-based Hon Hai Precision Ind. Co. Ltd., according to industry insiders.

The sources said that Matsushita, a major supplier of slim-type DVD drives in the international market originally shifted production of such products to its Chinese factory from the Philippines, but the results were not so satisfied. The Matsushita order is expected to inject about NT$50 billion (US$1.57 billion at US$1: NT$31.9) into Hon Hai's revenue this year, the sources added.

Matsushita and Hitachi-LG Data Storage (HLDS) are the leading vendors of slim-type DVD drives, shipments of which have been increasing rapidly in recent years due to climbing notebook PC sales. However, the sliding prices of such drives have also generated high pressure on makers.

Under cost concerns, Matsushita previously moved its slim-type DVD drive production to the Philippines and again shifted such production to China under business integration considerations in 2009. With strong capability in cost-cutting, Hon Hai, a major global EMS (electronics manufacturing services) provider, however, won the drive original equipment manufacturing (OEM) order from the Japanese drive brand.

Matsushita is also the most aggressive player in developing blu-ray disc (BD) drives. Currently, some major notebook PC brands, such as Acer, use mainly BD drives supplied by the Japanese company.

In addition to DVD drives, notebook PCs and LCD TVs, Hon Hai has been wining increasing contract orders for many new products, such as Apple's iPhones and the latest iPads.