Two Taiwanese largest manufacturers of optical discs – CMC Magnetics and Ritek – recently said they would raise funds in order to get equipment needed for production of Blu-ray discs, a next generation media. Both companies used to be interested only in HD DVD, but followed their U.S.-based rivals with adoption of both formats.
The two optical disc makers are planning to raise a total of $609.76 million in funds according to China Economic News Service agency. CMC will simultaneously carry out two fund-raising projects, including issuing $200 million in euro convertible bonds (ECBs) and another syndicated loan of $182.93 million. Ritek plans to issue $200 million worth of ECBs, the agency reports.
The additional funds are needed to finance purchases of production equipment for Blu-ray discs.
Earlier CMC Magnetics and Ritek planned to start production of blue-laser HD DVD discs as early as the end of 2005, while Lite-On IT and BenQ planned to offer blue-laser HD DVD drives at the end of 2005 or the first quarter of 2006. The Taiwan-based makers of optical discs claimed that HD DVD was easier and cheaper to make, as, unlike the Blu-ray standard, it does not require brand-new production equipment, but only new rear-section production equipment.
Late in 2005 U.S.-based optical disc supplier Imation said it would ship both HD DVD and Blu-ray products starting in the early part of 2006. The company’s next-generation discs are expected to feature scratch-resistant hard coating designed to protect the data that users will save on advanced optical discs.
There are a number of other Taiwan-based makers of optical discs, including Prodisc Technology and Otiodisc Technology who are planning to raise funds by about $61 and $30.5 million respectively.