CMC Magnetics, the largest producer of blank optical discs in Taiwan, plans to raise its OEM quotation for CD-R discs from US$0.135 (7p) to US$0.14 (7.2p) in January 2005, with a further increase to US$0.15 (7.8p) in February, according to the company.
The reasons behind the planned price increase include the ongoing polycarbonate (PC) shortage, which is expected to worsen next quarter, when PC producers plan to temporarily stop production due to their annual equipment maintenance, CMC pointed out.
CMC also explained that although its CD-R OEM price quotations are in US dollars, the company purchases some key components priced in Japanese yen, and its operating costs are based on the New Taiwan (NT) dollar. Both currencies have recently been appreciating against the US dollar.
The NT dollar exchange rate with the US dollar has appreciated from 34:1 in September to 32.2:1 currently. CMC claims that if the exchange rate moves to 32:1, the company’s gross margins will drop 1.7 percentage points.
In addition to CMC, other leading makers in Taiwan are expected to increase their OEM quotations for CD-R discs by about 10% in the first quarter of next year.
Story source:
digitimes.com.
