Optodisc To Double Disc Production

Optodisc Technology, a major DVD disc manufacturer in Taiwan, will expand its monthly production capacity to between 28 million and 30 million discs in mid-2004 from 14 million discs currently.

Optodisc used a syndicated loan of NT$1.05 billion obtained last year to expand its DVD disc capacity to 32 production lines, company president Jasper Chao said.

As the expanded capacity is still 35% short of order volume, the company will add 30 production lines, according to Chao.

Optodisc will also adjust its production mix between DVD-R discs and DVD+RW/DVD-RW discs to 7:3 in the second half of this year from 6:4 currently.

To fund the capacity expansion, Optodisc acquired a syndicated loan of NT$3.5 billion on January 15 from an 11-bank consortium led by Chiao Tung Bank. Part of the loan will be used for the company's headquarters building, which is under construction in the Hsinchu Science-Based Industrial Park (HSIP), Taiwan and expected to be completed in the fourth quarter of this year.

Optodisc will enlarge its staff to 1,000 employees by mid-2004 and 1,800 by the end of 2005 from 750 currently, Chao noted.

Optodisc started volume production of 8x DVD-R discs last month and has delivered more than one million discs per month. In addition, the company plans to offer single-sided, double-layer 8.5GB DVD discs and single-layer 25GB and double-layer 50GB Blu-ray DVD discs in the second half of this year, Chao pointed out.

Chao estimated global DVD demand at 1.6 billion discs this year. However, the price of 4x DVD-R discs reportedly has fallen to US$0.70 per disc in the first quarter of this year and may fall to US$0.60 in the second quarter.

Founded in April 2000, Optodisc turned profitable in 2003. The company last year recorded revenues of NT$2.238 billion, a gross margin of 50%, pre-tax profits of NT$770 million and an EPS of NT$5.16 based on its current capitalization of NT$1.49 billion. For this year, the company projects revenues of NT$4.83 billion and net profits of NT$1.22 billion.

Story source: digitimes.com.