Notes to the financial statements - Plasmon

from Nichia, our Japanese supplier. In
December 2002 Nichia announced a new
agreement to collaborate with Sony on blue
laser development for use in Sony’s ‘Blu-ray’
consumer video products. Nichia also
informed Plasmon that due to yield problems
with their existing laser, they were moving to
a revised laser design employing elements of
Sony technology. We have now successfully
integrated the new lasers into our UDO
drives and we are confident that their
performance and reliability will comfortably
exceed our requirements.
The opto-mechanical assembly (‘OMA’) for
the UDO drive is being developed by Pentax,
the leading Japanese optical technology
company. The hard tooling for the OMA is
now complete and we are currently
integrating production quality units into our
prototype drives. Our working relationship
with Pentax continues to be excellent and we
have recently despatched one of our
Japanese speaking engineers to Japan for
18 months to help transition the OMA to a
low cost volume production facility.
UDO media development is also making
good progress and we now have the majority
of the disk manufacturing equipment
installed at our facility in Melbourn. The new
cleanroom is fully commissioned and when
complete the production line will have a total
capacity of some 80,000 write-once and
rewritable UDO disks per month.
Development of the phase change recording
layers for UDO media is proceeding well and
the specification of the write-once disk is
now finalised for volume production. This will
employ a four layer structure based on phase
change technology licenced from Kodak that
we also use on our existing 12-inch optical
disk products. We are therefore very familiar
with the manufacturing process for this
material and are confident a high yield
process will be achieved.
The rewritable phase change disk is in its final
testing phase and will employ an eight layer
structure to optimise rewrite cycle
performance, environmental longevity and
manufacturability. In January 2003 we signed
a licence agreement with Mitsubishi
Chemical Media (‘MCM’) for their patents
and technologies for improving rewrite cycle
Plasmon Plc
Annual Report 2003
and cross erase performance in phase
change rewritable media. Using MCM’s
technology we have already exceeded the
UDO specification of 10,000 rewrite cycles
and with further optimisation, believe that
25,000 cycles may be achievable.
MCM are the world’s largest optical disk
manufacturer and as well as first class
technical know-how, they have an excellent
quality reputation with the major OEM
customers such as HP and IBM. We
continue to work closely with HP on their
UDO plans and as they move towards UDO
endorsement they are pressing MCM to be
the second source media manufacturer.
Major partners such as HP and MCM will be
critical in establishing UDO as the de-facto
standard in professional optical storage and
we continue to use every effort to secure
their endorsement of UDO.
Having established the UDO media
production facility and commenced trial
production runs, we are now working on
improvements to the 0.1mm cover layer
process to reduce volume production costs.
We have recently approved a European
supplier of optical grade 0.1mm film that has
reduced our material costs by some 75%
over Far East suppliers. In addition, we are
also working on a new liquid spin coating
technique that is now providing excellent
uniformity and will dramatically reduce future
production costs.
The media cartridge is an important
component in the overall robustness and
reliability of UDO technology and has been
an area of intense focus over the last year.
We have recently taken delivery of initial
samples from the final production tooling and
are now working with Dai-Nippon, our
Japanese supplier, to move volume
production to China to minimise long term
cartridge manufacturing costs.
Overall, the UDO development programme
is progressing well and we are on schedule
to make initial product deliveries in
September 2003. As expected, UDO’s
common technology base with consumer
Blu-ray products continues to provide
technology leverage opportunities and will
ensure our long-term manufacturing costs
remain competitive.
Chief Executive’s Review
9
Plasmon product mix 2003
5.25" 42%
12" 33%
CD/DVD 11%
Consultancy 7%
LTO tape 2%
Other 5%
Plasmon product mix 2002
5.25" 43%
12" 38%
CD/DVD 5%
Consultancy 6%
LTO tape 2%
Other 6%