History 2003: Recordable Optical Disc Manufacturing

The market for recordable optical discs (primarily CDR/ RW, DVD±R/RW) is a case apart, even if it recalls an earlier age of floppy disks.

We attempted, not without difficulty, to get a count of all manufacturers, and reached a tally of 128 (see tbelow). We can’t be sure that we didn’t miss any, or that the companies we’ve listed are all veritable manufacturers. And while 128 seems enormous, it also seems plausible. Note incidentally that the group includes a fair number of former floppy disk makers.

The first to embark in this sector were the classic storage media leaders (Fuji, Maxell, Philips, Pioneer, Sony, etc.). In the wake of their successes, and with the price dropping drastically, Asia soon took over, with Taiwan in front, by far the country to produce the most, led by Ritek, CMC and Prodisc. Of 128 firms, we calculated 23% were located in Taiwan, 13% in mainland China and 11% in Hong Kong, thus 47% in greater China. Japan accounts for 13%. For all of Asia, we get 73%. Europe does what it can with 23%, while the U.S. scarcely registers at 5%.

In no time at all, then, mainland China has become a major player, even if its production teams are still a ways off from running as many replication lines as the Taiwanese. According to an official Chinese source, there are currently some 300 production lines in mainland China, including 20 to 30 for writable DVD, primarily Shantou and Guangdong provinces.

According to Steag Hamatech, manufacturer CD/DVD recordable lines producing WW more than 25 million media per day, SAST was the first company to start CD-R production in China back in 1996

Many other new arrivals should follow, depending on the good will of GAPP, a Chinese governmental licensing body for optical discs that exercises strict control over foreign investment, but has loosened its grip since 2002.

It’s not always easy to figure out who the real owners of these Chinese firms are, but many were started as joint ventures with Taiwanese and local investment.

Could mainland China eventually become the largest manufacturer of recordable CDs or DVDs? It’s a worthwhile question, when you consider the rapidity and zeal with which China has embraced this segment. Especially since the country has a huge advantage: it does not pay, or rather refuses to pay, any royalties on the optical discs. Not a single company from mainland China is on record with Philips Royal Electronics as having paid royalties, whether the media are CD-R/RW, DVD±R/RW, or DVDRAM.

This article is an abstract of news published on issue 193 on February 2004 from the former paper version of Computer Data Storage Newsletter.