Abstract

Further increases in DVD burning speeds are bumping up against inevitable limits, and the current product mix does not contain anything new to attract consumer interest. Leading makers will use low-price strategies to struggle for market share. Japanese and Korean makers in cooperative ventures possess scale economy superiority, in-house components resources, and are free of technology rights burdens. Their superiority in vertical integration makes it difficult for Taiwanese makers to fight back.. The ODD market is characterized by competition based on scale economies. ODD market share growth space is thus limited. As the effects of Japanese and Korean joint ventures expand, the margin of survival for Taiwanese makers will continue to shrink.

Though some makers are already in strategic partnerships with major international vendors, such alliances are centered on royalties, and unlike the equal footing of the HLDS and TSST joint ventures, place Taiwanese makers in a weaker position. Simply put, superiority in the ODD industry is founded on the technology rights held by large Japanese and European makers. ODD industry competitiveness will thus be determined by the specification race between Japanese and European makers.

If DVD burner shipment share increases rapidly, makers of key components such as IC and optical pickup will be able to determine the rules of the game, as evidenced by Panasonic's promotion of the Super Multi specification. Those makers who have no way to avoid crippling losses of technology rights will be unable to survive independently.

Appendix

Research Scope

For the purposes of this research, "Optical Disk Drive" indicates a device for use in desktop or notebook computers, functioning in read-only mode (ROM) or as a CD recorder, accepting either CDs or DVDs, either external or built-in. Multimedia consumer electronics equipped with optical pickup heads or servo chipset loaders, such as DVD players, DVD recorders, game consoles, PVR, or digital KTV players, are not within the scope of this study.

Data contained in this study includes shipments from the following makers: Accesstek, Compal, Aopen, Asus, Min Chi Technology, Behavior Technology, CIS Technology, EPO, Foxconn, Lite-On, MSI (although MSI is withdrawing from production in 3Q 04), Protop, Proview, Quanta Storage, and Ultima. These players comprise approximately nine-tenths of all Taiwanese optical disk drives produced anywhere in the world.

Glossary of Terms