Wed, Apr 07, 2004 - Page 10 News List

Rough road ahead for FVD

By Amber Chung  /  STAFF REPORTER

The development of a domestic standard for optical information storage may boost the nation's position in the industry, but such a goal may be difficult to achieve, industry insiders said yesterday.

"Developing our own standard may give the nation's digital video disc (DVD) manufacturers, who are responsible for up to 80 percent of global DVD shipments, more negotiating power over royalties," said Gary Lai (賴晴風), an analyst at Insight Pacific Investment Research(月涵投顧).

He made the remark after the Taiwan Advanced Optical Storage Research Alliance (前瞻光儲存研發聯盟), formed by the Industrial Technology Research Institute (ITRI, 工研院) and some 28 domestic companies, announced the newly developed DVD standard, Forward Video Disc (FVD), earlier this week.

Disc makers such as CMC Corp (中環), recorder makers such as BenQ Corp (明基電通), chipset manufacturers such as VIA Technologies Inc (威盛電子) as well as software companies participated in the development scheme.

Lai said creating a new standard requires research and development work by hardware makers, such as those making DVD players and recorders.

The willingness of foreign companies, such as Royal Philips Electronics, which enjoy lucrative royalties, to give up their edge in this aspect, raises questions about the new standard, he said.

The first generation FVD, with a capacity of 5.4 to 6 gigabytes, uses a red laser to write in information onto the disc and uses Microsoft's compression technology -- Windows Media Video-9 -- to allow 135 minutes of high-definition content.

"Taiwan's DVD industry is the third-largest in the world after Japan and South Korea," said Huang Der-ray (黃得瑞), the alliance's chair as well as the deputy director-general of ITRI's Optoelectronics and System Laboratories.

The nation's DVD industry created some NT$280 billion worth of revenue last year, up from NT$210 billion in 2002, according to ITRI's figures.

The development of FVD is expected to lower domestic companies' royalty burden and create as much as NT$1 trillion worth of production in 2008 if the standard can be put into mass production, Huang said.

"We hope FVD will create a market while other advanced standards, like HD-DVD and Blu-Ray, are still not popular," he said. "The growing popularity of high-definition televisions may help as our standard outperforms current DVD specifications in this field."

The industry expects to start mass production under the FVD standard by the end of this year and sees an opportunity to prosper in the next two to three years, the industry veteran said.

Lite-On IT Corp (建興電子), the nation's largest original equipment manufacturer of DVD recorders, which also took part in the development project, said the success of the new standard depends on support and endorsements from global companies such as Dell Inc and Hewlett-Packard Corp.

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