BenQ, Lite-On poised to ship double-layer DVD burners

Taipei, April 8, 2004 (CENS)--Both Taiwan's BenQ Corp. and Lite-On IT Corp. recently claimed that they would start shipment of double-layer (DL) digital versatile disc (DVD) burner models late this month.

William Wang, BenQ's general manager of imaging network business group, claimed that his company's monthly shipment volume of DVD burners is expected to outstrip that of Lite-On for the first time in late May and the firm's second-quarter volume would grow by 20% to 30% from the first quarter.

Lite-On has been the No. 1 maker of optical disc drives in Taiwan for a long time. But BenQ's shipment volume of drives has kept rising to rival Lite-On's volume since BenQ and Royal Philips Electronics of the Netherlands formed late last year an optical storage device venture, the Philips BenQ Digital Storage, to produce optical storage products.

Currently, both Lite-On and BenQ are capable of delivering 300,000 to 400,000 DVD burners per month. But BenQ, with strong technical support from Philips, now runs ahead of Lite-On by one to three months in developing high-speed disc burner models. Now in the DL DVD burner market, industry sources said, they are also poised for fierce competition.

Kung Jen-wu, Lite-On president, said that his company will begin mass own-brand or ODM (original design manufacturer) production of 8X DL DVD burners this month. Industry sources said that Lite-On's big ODM customer should be the company's strategic alliance partner Sony of Japan.

According to Kung, Lite-On will immediately launch 12X DL DVD burner models in the coming few months in response to the price-sliding trend for 8X predecessors. The firm will also begin mass production of the 16X, the maximum-speed, such models in the third quarter this year.

BenQ's Wang said that his company has received big ODM orders for DL DVD burners and is scheduled to begin delivery this month. Industry sources said that the ODM customer should be Hewlett-Packard Co. (HP) of the U.S.

With the big ODM order, Wang said that BenQ is expected to ship about 500,000 DVD burners next month, a record monthly high among all local optical storage drive makers.

Wang is very confident of a 20% to 30% growth in BenQ's second-quarter shipment volume. In addition to the confirmed DL DVD burner orders, Wang said that his company is scheduled to ship about 200,000 notebook PC-use slim-type DVD drives and tens of thousands of family-use DVD player loader mechanisms in the second quarter.

Both Lite-On and BenQ said that the prices of DL DVD discs are still very high, about 5,000 yen for per disc made by Mitsubishi of Japan. The big-volume shipment of DL DVD burners is expected to come only after the disc prices fall in the future.

With two optical layers, one DL DVD disc has a storage capacity of nine giga-byte (GB), compared with 4.7 GB of a single-layer disc. The non-defect production rate for DL DVD discs is still very low, about only 10% at Mitsubishi, and therefore the prices are so high.

Most leading international electronics and information technology (IT) brands, including HP, Sony and Philips, are eyeing the DL DVD market, which is deemed as a killer application as one such disc can storage a complete movie data rather than two as seen currently.

Industry sources said that most optical disc drive makers of 8X DL DVD burners would directly jump into the production of the 16X models by skipping the 12X models, which are deemed only transitional ones.