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Ritek and CMC taking different roads to capacity expansion
Jimmy Hsu, Taipei; Christy Lee,

As the global demand for CD-R discs begins to rise, Taiwan-based Ritek and CMC Magnetics, two leading CD-R disc manufacturers, have started to expand their production capacity to meet future needs. The overall market scale is expected to increase from 4.5 billion units estimated in early 2001 to the current 5.2 billion. Although these two major players both decided to increase capacity another 30-40 million CD-R discs this year, they have chosen different sites for their expansion, indicating their individual strategies in their development roadmaps.

Considering the company’s global development and wanting to avoid potential problems with the anti-dumping laws of the European Union (EU), Ritek chose its plants in the US, Australia, the UK and Germany as the bases for capacity expansion. It also plans to go to China, but due to related regulations, the project will have to wait for approval from both Taiwan and China’s governments before it can really be put into practice.

The other optical storage media maker, CMC, decided to establish more production lines in its Taiwanese factories, and it will consider increasing the number of production lines in its Mexico plant depending on market demand. When asked about whether the company plans to establish a production base in China, CMC said that moving its CD-R disc operation to China would not necessarily let the company enjoy a great cost advantage, since CD-R disc production is already highly automated. However, the company will consider the possibility as a move for early positioning in the China market.

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