07.12.2001
Capacity expansion underway

• Development: Due to turnaround in CD-R prices, most large and small manufacturers in the industry are expanding capacity.

• Analysis: The increase is expected to expand current global capacity by 10%, and will likely pressure CD-R prices in 4Q01 when seasonal summer sales are over.

• Primasia View: The shares of major CD-R makers are trading above fair value with PERs over 20x for 2001. We expect CD-R demand to grow sequentially through 2001; however, we remain concerned on the sustainability of revenue growth from 4Q01.

VincentChen@Primasia.com +886-[0]2-2547-8868