Sales of DVD-ROMs to go up as prices go down

DVD-ROM drive sales will grow significantly in the second half of this year and eat into CD-ROM drive sales, as the devices see a more rapid price decline, Taiwanese distributors project. Contract manufacturing prices for CD-ROM drives had reportedly fallen to US$15 late in the second quarter of this year from US$17-18 in the first quarter, while contract prices for DVD-ROM drives declined to about US$26-27 in the second quarter from US$30 in early 2003, according to sources.

Although the gap between DVD-ROM and CD-ROM drive prices is still considerably wide, prices for DVD-ROM drives are expected to drop at much faster rates because of expected reductions in the cost of key components like chip sets and pick-up heads (PUHs). Prices for CD-ROMs, on the other hand, have reached a bottom line that is close to production costs, sources said.

Projecting the rising demand, many major optical storage drive makers, including Lite-On IT, BenQ, Samsung Electronics and Hitachi-LG Data Storage (HLDS), are gearing up to expand DVD-ROM drive production capacity, which is expected to further bring down prices, sources said.

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