Shanghai United Optical Disc has completed the installation of its first disc production line for CBHD (China Blue High-Definition Disc), China's high-definition optical disc format mostly based on the DVD Forum's HD DVD specifications. Volume production will start in the fourth quarter of 2008 for the China market initially, according to Chinese-language online media outlet enorth.com.cn.

However, Taiwan-based drive makers generally believe CBHD will find it difficult to compete with Blu-ray Disc (BD) in the China market, according to industry sources cited by DigiTimes. CBHD was, until recently, know as CH DVD (China High Definition DVD).

A production line for DVD discs can be refitted to manufacture CBHD discs at a cost of US$800,000, much lower than the US$3 million needed to set up a BD disc production line, enorth.com.cn pointed out.

Royalty fees to produce licensed CBHD players will be about 55 yuan (US$8.10), much lower than BD licensing rates, the industry sources in Taiwan indicated. But members of the BD Association have reduced retail prices for their entry-level BD players in the North American market to about US$299 and prices may drop further meaning CBHD players will face challenging price competition when they are launched in the China market, the sources say.

In addition, CBHD has not won support from leading movie studios in Hollywood and this is expected to render the format at a significant disadvantage in competition with BD, the sources pointed out.

Story filed 28.07.08