With only slim DVD recorder drives affected by key component shortages, the strong the strong retail season helped Taiwanese ODD (Optical Disk Drive) shipments attain slightly stronger growth in the fourth quarter than seen in the third. Forth-quarter shipment volume reached 29 million units, climbing 6.4% year-on-year. The moderate increase came on the back of a higher base set in the fourth quarter of 2003, a period when the SARS effects began to wane and orders subsequently poured in. ASP (Average Selling Price) slid to US$32.6 in the fourth quarter of 2004 while shipment value shrank 1.8% year-on-year to US$947 million.
The drop in shipment value was chiefly attributable to the rapid fall in price of DVD recorder drives. Such devices came to comprise a larger 24.4% share of Taiwanese ODD shipments in the fourth quarter, and price declines on these typically higher-priced offerings had a dramatic impact on total value.
Prices of mainstream 16X DVD recorder drives declined 12% sequentially to US$60 in the fourth quarter, further driving down ASP and preventing shipment value from increasing in tandem with shipment volume. Combined with price reductions on CD-ROM/RW, DVD-ROM, and combo drives, ODD ASP registered an 8.2% slide year-on-year. This downward trend is expected to continue before Blue-ray models enter mass production.
Since DVD recorder drives have reached the maximum writing speed of 16X, industry competition will likely shift from specifications to market share. TSST (Toshiba Samsung Storage Technologies), the second largest vendor in the industry, is expected to first launch low-priced DVD recorder drives to take on the largest vendor HLDS (Hitachi LG Data Storage). Taiwanese makers such as Lite-On and BenQ are likely to suffer a negative impact as a result. In the first quarter of 2005, competition between the two vendors and seasonal effects are expected to result in a slowdown in the Taiwanese ODD industry. Shipment volume is anticipated to drop to barely 27 million units in the first quarter of 2004, growing 4.7% year-on-year.
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