Philips Negotiates New CD-R Royalties

A consensus is not being expected till the end of June at the earliest, according to the Taiwanese makers.

Philips currently imposes royalty charges of US$0.045 per CD-R disc and US$0.06 per DVD+R disc on Taiwanese licensees. As the OEM price for CD-Rs has dropped to US$0.15-0.2 per disc, royalty payments have risen to 22.5%-30% of revenues.

In addition to the drop in CD-R pricing, other factors lead Taiwanese makers to expect Philips to lower its royalty charges. On March 11, a US International Trade Commission’s (ITC) final judgment ruled against Philips in a case where the company accused two Taiwanese optical disc makers of patent infringement. Also, Japanese companies including Sony, Taiyo Yuden and others have offered lower royalty charges for Taiwanese makers.

Source: DigiTimes

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