Toshiba Unveils 8x CD-ROM Drive, Quad-Speed Prices Plummet

Japan's Toshiba has begun shipping samples of an 8-time (8x) rotational speed CD-ROM drive, while storage system vendors scramble to rid themselves of an oversupply of older quad-speed drives.

The Toshiba drive, sample priced in Japan at US$566), has a sustained data transfer rate of 1200Kb/s over an ATAPI interface and random access time of 145ms, the company says.

The unit, called XM-5602B, has a burst data transfer rate of 11.2Mb/s in PIO (Programmed Input Output) mode and 13.3ms in DMA (Direct Memory Access) mode, the company says.

Toshiba's announcement follows on the heels of Pioneer's March announcement of a 10 times rotational drive and precedes the rollout next month of an 8x drive by Teac, a Teac official says.

The high-speed drives' arrival comes at a time of turmoil in the CD-ROM market. Overestimated demand for PCs in last year's fourth quarter, when quad-speed CD-ROM drives were still the standard equipment, has left top drive makers scrambling to sell off excess inventory, company sources say.

As a result prices for those drives are plummeting. An official at one company said he has seen quotes as low as US$35 for quad-speed drives, which only a few months ago were selling for twice as much. "Major OEMs are changing from 4x to 6x -- everybody is afraid of 4x now," says an official at a large CD-ROM maker in Japan. Consequently, "many manufacturers are suffering."

Excess inventory of quad-speed drives recently forced Singapore's Creative Technology to announce that it would write off between US$20 million and US$30 million in inventory in this year's first quarter ending March 31.

In Taiwan, meanwhile, several smaller CD-ROM drive makers are now bailing out of the quad-speed market or scaling down their efforts due to small profit margins. Elitegroup Computer Systems, one of Taiwan's larger motherboard and PC makers, for example, recently announced that it would scale down its CD-ROM drive business.

Observers note that companies such as Elitegroup, which only made about 50,000 units per month, simply cannot make any money due to the low margins and volume-oriented focus of the CD-ROM drive business.

Meanwhile, industry focus -- led by the dominant Japanese electronics giants -- continues to shift to the faster drives.

"In the fourth quarter everybody will require 8x drives," says one official at a Japaneses maker. "The third quarter will be a transition period between 6x and 8x," he says.

Industry sources say that the relentless drive to higher speeds will be a boon to buyers. By year-end the OEM price of an 8x CD-ROM drive will hit roughly US$120, according to market researcher IDC Japan.

Still, some officials believe the drives will go as low as US$100. Such price pressure is likely to make CD-ROM drive manufacturing a losing proposition for all but the biggest makers, analysts say.

Singapore's Creative Technology, for example, which has been making around 100,000 drives per month, is currently mulling pulling the plug on its in-house manufacturing efforts and relying on outside suppliers, sources close to the company says.

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