In contrast to projected 4.8% growth in global optical storage production, Taiwanese makers are headed for a 7.7% decline this year, predicts the Photonics Industry and Technology Development Association (PIDA), citing falling average selling prices (ASPs) and slow production shifts to more advanced devices. The Taiwan-based association said that Taiwan would produce an estimated NT$132.5 billion (about US$3.836 billion) of optical storage equipment this year. Worldwide production is projected at US$37.372 billion.

Taiwanese companies dominate CD-ROM, CD-R and CD-RW disc production, but prices of these products are continuing to drop, explained Anson Cheng, a PIDA analyst. In high-end DVD-R and DVD-RW discs, local companies will maintain their current small-scale shipments. Japanese companies, on the other hand, will hold onto the lion’s share of game-use DVD-ROM disc production, Cheng added.

The association also blames the expected decline on Taiwan’s poor penetration of the home entertainment market. While Taiwanese companies have a high penetration of the CD and DVD drive PC peripheral market, these devices face weakening selling prices. DVD players and recorders aimed at the consumer market will become major revenue sources for optical storage makers, Cheng said.