Lite-On Technology might land DVD PUH component orders from Sony

[Wednesday 22 January 2003]


According to sources, Sony may transfer technology for pick-up head (PUH) key components such as holographic optical elements (HOE), laser diodes (LD) and sensor components to Lite-On Technology and outsource production to it. However, Lite-On Technology denied the news.

Sources pointed out that the orders would be to produce HOE, LD and sensor components and assemble semi-finished PUHs by integrating these components together. The products would be shipped to Sony’s contract manufacturers, both local and overseas companies, and will be used in Sony’s PlayStation 2 game console and DVD players. By roughly calculating Sony’s PUH shipments this year at 45 million units and deducting 9% external sales, the orders could amount to around 40 million PUHs.

For key components such as LDs and sensor components, some Taiwanese manufacturers have begun producing them, whereas none of the Taiwanese makers has yet be able to produce HOEs. Sources said that Lite-On Technology might purchase HOE raw materials, such as objective lens, collimating lens and diffraction grating, from Taiwan-based E-Pin Optical Industry. E-Pin Optical Industry has sent samples of plastic objective lens and collimating lens to Lite-On Technology and expects to get a response by the end of this month. The company also will send samples of three-pin diffraction grating to Lite-On Technology this month, sources said.

It is believed that the falling prices and decreasing profit margins of read-only PUHs is forcing Sony to transfer key component technology and orders to contractors, which would allow it to focus on high-end product and decrease its manufacturing costs for these lower margin products.

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