NEC, the world's largest producer of DVD burners in 2003, has reduced its OEM price for 8x DVD-Dual burners from US$110-120 (£59-64) at the beginning of this year to about US$95 (£51), according to Taiwanese manufacturers.
Both NEC and Pioneer started volume production of 8x8 Dual format DVD burners, which can write either DVD-R or DVD+R discs at 8x speed, about one month ago, Taiwanese makers said. Taiwanese OEM makers currently focus on 8x DVD+RW drives, which only allow writing of 8x DVD+R discs, with OEM quotations below US$100.
Taiwan's top makers, including Lite-On IT and BenQ, began volume production of 8x DVD burners half a year ago, each with monthly shipments rising from below 1,000 units to 250,000-300,000 currently. They also produce 8x DVD-Dual burners in small volumes.
NEC, faced with increasing competition from Taiwan's OEM makers, had little choice but to cut its price to secure OEM orders for 8x DVD-Dual burners from Dell, Hewlett-Packard (HP) and other international brands, the Taiwanese makers indicated. Taiwanese makers expect that, as OEM profitability is thinning, NEC will sooner or later follow Sony in stopping such production.
Taiwanese OEM makers pointed out that NEC's price cut will force them to follow suit to compete for OEM orders. According to Lite-On IT's Optical Disc Drive Business general manager Michael Gong, Taiwan accounted for 13% of global DVD burner output in 2003. Global demand for DVD burners, including half-height and slim type drives, will reach 45 million to 50 million units this year and Taiwanese makers' total share will exceed 30%, Gong predicted.
