Expecting demand to exceed its capacity in the second half of 2002, Lite-On IT, the world’s third-largest optical disc drive manufacturer, has again announced capacity expansion plans. The company will shortly begin construction of a factory in Guangzhou, Guangdong Province (China) with a monthly capacity of 1.5 million units. It should be ready for volume production by year-end. Lite-On IT said its monthly shipments in the first quarter will remain at 2.3 million to 2.5 million optical disc drives. The second quarter is still expected to be the slow season, and current capacity should be enough to satisfy demand through that time.

However, starting in the second half, orders will begin to exceed capacity. Lite-On IT plans to subcontract production of 500,000 units each month until its new facilities are ready.

Lite-On IT’s existing Dongguan, Guangdong Province factory can produce up to three million optical disc drives a month. Once the Guangzhou factory is completed, Lite-On IT will combine and realign production lines at Dongguan and Guangzhou, making its total monthly capacity four million units. That should be enough to satisfy demand for the next two years.

Lite-On IT currently ships 800,000-900,000 CD-ROM drives, 800,000 to one million CD-RW drives and 300,000-400,000 DVD-ROM drives each month. It has set a target of shipping eight million units in the first quarter, up from 6.5 million units in the previous quarter.

Concerning the current shortage of CD-RW pick-up heads, Lite-On IT said large-volume manufacturers have not been affected as much as smaller companies and the shortage should ease in the second quarter.

Lite-On IT is entering the DVD player and other consumer-oriented optical disc drive businesses. Products should be ready in the third quarter. The company will launch a slim-type combo (DVD-ROM/CD-RW) drive in the second quarter. It is following up the recent launch of a USB 1.1 24x speed external CD-RW drive with volume production of a USB 2.0/IEEE 1394 40x speed model in April.