Profits for CMC as disc industry stabilizes

According to a recent report in DIGITIMES, CMC Magnetics has announced that it expects its third-quarter optical disc manufacturing revenues to grow 10%, allowing it to make a profit. This, according to the company, is a result of second-tier disc manufacturers gradually phasing out of the optical disc market, and larger replicators – such as Ritek and CMC itself – reducing their disc capacity by as much as 40%, thus stabilizing the disc supply and demand status and boosting disc margins.

Prices have seen a 50% rise compared to those of early 2011, said DIGITIMES, helping gross margins for the production of CD-R and DVD-R discs to break even; revenue contributions from Blu-ray Disc, with higher gross margins, will increase, leading to the expected increased performance for CMC in Q3.

As the traditionally busy disc season approaches, CMC expects its revenues in Q4 to be stronger again, with overall revenue performance in the second half of the year to be better than in the first.