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  • Taiwan DVD Makers Pinched by High Operating Costs, Technical Inadequacy
  • December 24, 1998 (TAIPEI) -- Taiwan's DVD player makers are being pinched by a bearish market, a dispute over specifications, expensive hardware prices, competition from China and a failure to catch up with Japanese technology.
    Key production know-how and component production in DVD is still largely controlled by leading makers in Japan and the United States, limiting leeway for domestic makers.

    In response, most domestic makers have adopted one of two manufacturing strategies. They have either placed OEM orders with Japanese counterparts, or purchased chip sets and pick-up heads from Japan and the United States for assembly in Taiwan.

    Royal Information Electronics Co., Ltd., Tatung Co., Ltd. and Acer Inc. have all started retailing DVD players this year, while Sampo Technology Corp. is still undertaking certification. Other technology firms planning to make inroads into the industry are Teco Information Systems Co., Ltd., Sanyo Electric (Taiwan) Co., Ltd., ADI Corp. and Proton Electronic Industrial Co., Ltd.

    Statistics show that DVDs were not as popular as expected in the local market this year. A Royal Information spokesman said the local market has demanded only 50,000 units so far this year, a far cry from the 60,000 units forecasted previously. Japanese products have proven the best sellers this year.

    The undersupply in DVD software, with legal circulation falling below 1,200 pieces at present, has weighed on market demand, observers said.

    A specification dispute between AC-3 and DTS, with the former still a mainstream product, has encouraged potential buyers to wait and see.

    The requirement that DVD should be used along with high-definition TV, as well as a 5.1 or six-box stereo system, has also capped buying interest.

    (Commercial Times, Taiwan)

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    Updated: Wed Dec 23 15:00:51 1998 PDT