History 2003: WW CD-R/RW Market Revenue at $4,164 Million in 2002

CD-R/RW is the leading removable storage technology in the computer industry, with overall dollar sales of $4,164 million in 2002, according to the most recent executive summary for 2002 of CD Tracker published by the Santa Clara Consulting Group.

CD-R/RW writer sales continued to be strong during the year, with unit sales increasing more than 38%. Media unit sales grew by 20%, but continued price degradation limited revenue growth to-6%.

Writer sales were inconsistent during the year with a strong 2002 followed by a decline the following quarter and sales flattening out for the balance of the year.

There was a rapid transition to high-speed writers, with 12X dominating shipments at the start of the year and most writers sold in 4002 being greater than 32X in speed.

Aggressive pricing continued, with very little premium offered for faster speeds.

Clearly the CD writer has become a commodity product.

WW writer sales increased to 62.8 million in 2002. The business was fragmented, with 9 major speeds of writers sold during the year. The 12X writers were the preferred product for the PC OEMs at the start of the year and maintained 26% of the market.

This transitioned in the second half of the year to 32X and 40X writers which influenced the >16X segment (24X, 32x, 40X, 48X, and 52X) growth to 48% of the market. Other segments included 8X writers, representing 12% of sales and 16X writers with 13%.

4x writers (1%) are no longer manufactured, but they continued to have a minimal share because vendors sold higher-speed drives (8X and 12X) rated as 4X in external drives supporting the USB interface.

Disc media continued to see a combination of strong growth and low pricing.

Legal issues relating to license fees and anti-dumping investigation and rulings in Europe were important factors in the market. In Europe, the influence of the anti-dumping duties was not evident until 3Q02 because of large inventory already on the continent at the end of 2001.

Pricing stabilized and was increasing by the end of the 2002. It is now estimated that there is 29% more supply than demand for CD-R discs. This might not account for older production lines that are not being used. Regional issues (royalties, anti-dumping), especially in Europe, have limited the import of Taiwan manufactured products. This has caused tightening of supplies in this region.

Taiwan dominates manufacturing for CD-R discs, now representing 57% of global capacity. India is a growing factor, with Moser Baer ramping production.

CD-R disk pricing started the year at $0.30 and increased modestly to $0.31 by 2002. Pricing increased towards the end of the year influenced by enforcement of royalty payments by Philips, Sony and Taiyo Yuden, and anti-dumping duties in Europe. Taiwan-based manufacturers were compelled to increase prices to reflect this added charge.

Unit sales increased by 20%, from 4,532 million units to 5,441 million units during the year.

This article is an abstract of news published on issue 182 on March 2003 from the former paper version of Computer Data Storage Newsletter.

Note: Rewritable CDs were replaced by rewritable DVDs now a tiny market.