CMC reports fire at plant-assessing damage to facility

src="http://www.cdfreaks.com/contentimages/newsimages/1344071848" align=right border=0>The
optical disc maker said the plant, located at Yangmei, Taoyuan County, is
a relatively smaller plant. Although CMC stressed that the plant’s
structure, equipment, and goods are fully insured, sources said CMC’s
monthly capacity will be reduced by about nine million units due to the
fire.

The plant accounted for 10% of CMC’s overall CD-R capacity and
CMC’s CD-R discs mainly support demand from major international brands,
the sources stated. Since it takes at least three months to have CD-R
discs validated, second-tier makers will not be able to absorb those
orders and major competitors Ritek and Prodisc Technology will be the
indirect beneficiaries of the fire, the sources indicated.

Global supply of CD-R discs has been tight due to transfer of
capacity from CD-R to DVD+R/-R.

With CD-R production running at full capacity now, second-tier
optical disc makers have planned to raise their quotes by 3% this month,
while CMC and Ritek had originally planned to keep their current price
levels. However, due to the fire, CD-R prices may increase next quarter,
the sources said.