CMC Magnetics will not start commercial production of blank Blu-ray Disc (BD) discs until the global BD market emerges to some extent, and will instead invest in BD R&D to cultivate its technological capabilities in the interim, according to company chairman, Robert Wong.
Since as many as 21 owners of BD patents plan to claim royalty charges, there are many problems that need to be solved while charge rates are expected to be high, Wong pointed out. In addition, production equipment for BD discs is currently very expensive. The cost of equipment and royalties, together with the small demand render BD investment unfeasible at the moment, which is why CMC will not to step into production of BD-R (recordable, write once) and BD-RE (rewritable) discs for the time being, Wong explained.
Partly because of problems concerning BD royalties, the global BD market will take two to three years more to take off, Wong predicted. In contrast, the global demand for pre-recorded BD discs, mostly movie discs, will emerge earlier due to the boost from leading movie studios in Hollywood, Wong noted.
In the past, makers of optical discs in China and India negotiated CD and DVD royalty rates through their government and professional associations respectively, but Taiwan-based makers negotiated individually, Wong pointed out. Thus, Taiwan makers may not have enough bargaining power in future BD royalty negotiations, Wong said.