"Due to escalating demand for DVD media that has surpassed anyone's expectations or forecasts, factory capacity has had to be shifted from CD-R to DVD production," explained Don Patrican, executive vice president of Maxell. "The shift will bring the CD-R supply-demand ratio into balance for the first time and will create the potential for tight inventories of CD-R products. This combined with an increase in petrochemical costs has caused our suppliers to increase their prices to us and we have no choice but to pass the price increase on to our customers. We feel that while we may be the first to announce CD-R price increases, we will certainly not be the only supplier to do so."
Patrican added that for the foreseeable future the combined volume demand for CD-R and DVD will stretch manufacturing capacity worldwide for disc-based products."The days of price elasticity due to excess factory capacity are over," Patrican said.