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Technical Insight

CD and DVD laser prices fall (News from Japan)

Prices for the semiconductor lasers used in optical pickups for CD and DVD drives are falling rapidly in Japan, according to a report in the Nikkei Industrial Daily. Demand for CD-ROM lasers (low power 780 nm AlGaAs-based devices) is falling as major computer manufacturers adopt CD-R/RW and DVD-ROM drives as standard features in their new units. The drives require higher-powered 780 nm lasers, and 650 nm lasers, respectively. As a result, inventory levels for CD-ROM lasers are rising and prices have dropped about 30% since spring 2000 when the lasers were priced at 5060 (4352 cents) per unit in large volumes. In addition, prices are falling for lasers used in 4 CD-R/RW units as manufacturers compete to make faster (8 and 12 X) drives. Meanwhile, prices for the optical pickups used in DVD and DVD-ROM drives have also fallen, in some cases by more than 10%, since the start of the year. Demand was not as high as expected during the holiday season at the end of last year, due in part to the slowdown in the US economy. The Nikkei Industrial Daily reports that the most common type of optical pickup, which can be used in CD and CD-RW drives as well as DVD drives, is currently selling for 15001600 ($12.9 13.7) in large volumes. This is down 12% from the 2000 OctoberDecember quarter. One pickup maker was quoted as saying that some equipment manufacturers have enough inventory to last through to mid-May, which should keep prices down. The situation is markedly different from last summer, when these components were in short supply and OEMs were scrambling to secure supplies in advance.
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