Supply of pick-up heads (PUHs) for DVD+RW and DVD-RW drives has tightened since November and is likely to continue to be tight until the second quarter, according to some Taiwanese optical drive makers. The supply crunch has been caused by a shortage laser diodes (LDs), a key component, as the dominant Japanese suppliers have not expanded output enough to keep up with increasing demand. Sharp Electronics is the main LD supplier to Hitachi, Sanyo Electric, Ricoh and Philips. Some Taiwan optical drive makers pointed out that it takes about four to six months to expand output. Therefore, the shortage may ease by the middle of the second quarter. Philips currently is the only PUH supplier with a relatively large capacity and high yield rate.

The market expects DVD+RW and DVD-RW drives/players to replace VHS video recorders in two to three years. Philips and other leading manufacturers have lowered DVD+RW player prices from an original NT$80,000-90,000 to NT$40,000 or less currently.

Besides Japanese vendors, Taiwanese companies are starting to enter the DVD+RW drive market, aiming not only at PC-use drives but also DVD+RW players, which may replace current DVD players.

According to MEP, Ricoh’s Taiwan distributor, though PUH suppliers will perhaps meet current levels of demand in the second quarter, optical drive makers’ expanding output might extend the PUH shortage.