Optical storage media manufacturer Prodisc Technology Inc (精碟) announced yesterday that it had received an order for thin film filters used for increasing bandwidth in optical networks from Genesis Communication Technology Co, a Tainan-based subsidiary of power and optical cable manufacturer Hua Eng Wire and Cable Co (榮電).
The order, which will add NT$200 million to Prodisc's revenue, will entail Prodisc supplying Genesis with 100 gigahertz and 200 gigahertz thin film filters for dense wave division multiplexing (DWDM) -- a fiber-optic transmission technique that employs light wavelengths to transmit large amounts of data.
The filters are important components that increase transmission capacity.
The order is considered small, but a good start towards Prodisc's move into the high profit, high growth field of broadband networking and away from its revenue reliance on recordable compact discs (CD-R), analysts said.
CD-R production, which is expected to account for 85 percent of the company's revenue this year, has reduced Prodisc's revenue and profits as the price of the discs has tumbled throughout the year.
The company lowered its expected year 2000 earnings per share by nearly 40 percent to NT$4.93 at the end of October.
"The order is good news, but the amount in monetary terms isn't so large," said Richard Wu, an analyst at International Securities Co.
Prodisc predicts that it will earn about NT$2.5 billion in revenue next year from thin film filters, so the order represents a step toward meeting that goal, said Wu. Still, "It's only one company," said Wu. "Prodisc has to continue to find more customers if it wants to reach that target," he said.
Prodisc said yesterday that five companies in North America and six companies in Asia were checking out samples of the DWDM component. Clients tend to take two to three months testing out samples before making an order, analyst said.
Genesis took nearly two months before making its order. The company was unwilling to comment about the order.
But demand shouldn't be the problem, analysts said.
"Dense wave division multiplexing is a good industry," said an analyst at Entrust Securities Co. "The demand is so strong that no matter how much you produce, you can sell it all," the analyst observed.
The need for increased bandwidth capacity is expected to continue to grow rapidly as the likes of Internet access, teleconferencing, and data and video transmission have increased traffic and consumer demand for capacity. DWDM responds to these demands over one network.
The bigger challenge for Prodisc will be to increase output capacity for a product that is difficult to make and only yields high profit margins if yield rates are acceptable.
"If they can reach a 30 percent yield rate, increase production, and increase their clients, then they should make pretty solid profits," said International Securities' Wu.
Prodisc began production of the filters in September with four production lines. Mass production began last month, and the company plans to have 10 product lines installed by the end of this year. That number should increase to 30 product lines by the end of next year, the company said.
"It'll add two production lines per month," said the analyst at Entrust Securities.
While the company's share price is likely to trade lower during the first half of next year because of a lower predicted earnings per share, it should pick up in the second half of the year as DWDM production increases in capacity and profitability, the analyst said.
"In 2002, they should have a promising year," the analyst said.
Yesterday, shares in Prodisc rose 3.45 percent to NT$51.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique