Taiwan-based optical drive maker Quanta Storage, facing declines in both shipments and revenues in early 2011, has turned conservative about its performance in the future and is also turning its focus on maintaining its gross margins despite expecting to see sequential growth in second-quarter shipments.
Facing fierce competition from Korea-based Hitachi-LG Data Storage (HLDS) and Toshiba-Samsung Storage Technology (TSST) as well as Taiwan-based Lite-On IT, Quanta Storage has seen its share in the optical drive market shrinking and only achieved revenues of NT$2.41 billion (US$84.46 million) for the first quarter with net profit of NT$118 million.
The company's lawsuit with Japan-based Rioch Company over intellectual property was settled in March and Quanta Storage pointed out that the lawsuit did not impact the company's shipment process, and the settlement with Ricoh also will not benefit the company in landing orders; however, since the company already prepared NT$460 million for the lawsuit in 2009, its settlement will not create any impact toward the company's financial status in 2011.
Since the optical drive market has been under fierce price competition over the past few quarters, Quanta Storage is currently not capable of expanding its market share, but will focus on maintain its profit.
Since shipments of notebook models equipped with Blu-ray drives are still limited in 2011, Quanta Storage is unlikely to benefit much from the business, since the company still has not yet had any Blu-ray-related products enter mass shipments. Meanwhile, the company is focusing on gaining certification from vendors for car-use optical drives. Although car-use optical drives have a rather high gross margin, the segment's contribution to the company's revenues in 2011 is expected to maintain at a single-digit percentage share.
Article translated by Joseph Tsai
