DigiTimes projects that Asustek Computer is likely to ship 4.5 million optical storage drives this year, up 35% from 3.3 million units last year. Asustek’s sales of optical storage drives in the first three quarters of 2002 already matched its sales from all of last year. The business is the fastest-growth sector for the company, despite contributing only about 5-6% to its total revenues. Hiko Lin, a Market Intelligence Center (MIC) analyst, projects 16.2% growth in global slim-type drive shipments next year, much higher than the 3.4% growth he estimates for overall optical drive shipments.

Asustek said it will aim at the high-margin slim-type CD-RW and CD-RW/DVD-ROM combo drives, especially external ones for notebooks. The company said that built-in drives are less profitable, and thus, are not the company’s focus. Currently, it uses Toshiba’s built-in models in the majority of its own-brand notebooks.

The company’s built-in drives are used in some of its notebooks and sold to industrial PC makers as well as second-tier notebook manufacturers.

According to Lin, the built-in, slim-type combo drive has a 20% profit margin, while the external ones can generate profit margins as high as 25-30%. The difference derives from the external drives being branded and from better cost controls when power supply components are included in purchasing, Lin added.