Thanks to higher demand, profit margins for optical disc makers have increased so far in 2011. CD-R and DVD-r disc prices are expected to rise by 20% in the second half of this year, according to CMC Magnetics chairman Robert Wong, quoted in CENS.com

Ritek, another major optical disc maker in Taiwan, also says that disc prices have been rising this year due to rising material prices. CD-r and DVD-r disc prices are expected to rise further in the third quarter.

Wong said that many Chinese and Taiwanese optical disc makers have been withdrawing from the business, while some Japanese (JVC / Taiyo Yuden) disc makers also stopped production after the massive earthquake in March.

CMC has raised all its disc prices by an average 30% since March.

The supply shortage of CD-R discs has pushed up prices by about 40% since early this year, the first since 2009, Wong said, pointing out that the optical-disc sector has turned into a sellers’ market, a move that will benefit CMC’s future operation.

“Flooding orders are filling production lines throughout the year-end. Fourth quarter operations will turn profitable.”

This is big news for CD-r and DVD-r disc manufacturers like CMC which have posted losses the past couple of years.