According to DigiTimes, the demand for CD-R discs has been growing recently as distributors are increasing inventories amid worries that the SARS epidemic might affect supply. Strong demand has been seen not only for 48x and 52x discs but also for 24x and 32x products, sources said. With most of their clients from major brand companies, first-tier optical disc makers in Taiwan usually see low demand for 24x and 32x discs compared to those with higher capacities. But due to tight supply, customers are now willing to take 24x and 32x discs with prices just US$0.01 lower than those for 48x and 52x discs, sources said.

The news is seen by the industry as a confirmation of continuing price jumps for CD-R discs starting last year. Prices for CD-R discs have grown from as low as US$0.15 in the second half of 2002 to US$0.18-US$0.19 recently. Further growth of 10-20% is expected as major suppliers all report plans to raise prices again in the second half of this year, usually the peak season for the industry.

CD-R disc prices dropped to a record low level in the second half of 2002 when major local CD-R makers experienced large production expansion. Since then, the suppliers have not expanded further. Thanks to growing demand, the companies have seen high utilization rates over the past few months, they said.