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Optical disc maker CMC Magnetics expects 10% growth in 3Q11 revenues

Optical disc maker CMC Magnetics expects its third-quarter revenues to grow 10% sequentially and is also expected to turn a profit, as second-tier disc makers are gradually phasing out of the optical disc market, while first-tier players Ritek and the company itself have both reduced their disc capacity by 30-40%, allowing the supply status of optical discs to return to normal helping to boost optical disc prices.

Since optical disc prices already enjoyed a 50% rise compared to those of early 2011, helping gross margins for the production of CD-R and DVD-R discs to break even, and the revenue contribution from Blu-ray disc (BD), which has higher gross margins, will expand, CMC is expected to achieve increasing performance in the third quarter.

As for the fourth quarter, since blockbuster movies for the summer will gradually enter the entertainment optical disc market, CMC expects its revenues in the fourth quarter to be stronger than in the third, with the overall revenue performance in the second half to be better than in the first. (Source: DigiTimes)

Story filed 08.09.11

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