TDK has announced that in the process of restructuring their media business, they've decided to stop manufacturing their own recordable CD's and DVD's.
TDK Corporation (NYSE:TDK - News) announced today that the board of directors decided at the board meeting held on March 8, 2006, to further accelerate the restructuring of recording media business, to withdraw from the manufacturing of recordable CD&DVD products in TDK group. Consequently, TDK decided to shut down the production facilities at its European subsidiary, TDK Recording Media Europe in Grand Duchy of Luxembourg. The shut down is planned to take place at the end of May 2006. This decision completes TDK's withdrawal from the manufacturing of recordable CD & DVD products, coupled with the reorganization of plants in Chikumagawa area (Nagano, Japan) implemented at the end of last year.
TDK Corporation and its group companies (hereinafter called "TDK") have been fundamentally restructuring the recording media business during this fiscal year. While reviewing the progress of the restructuring and future strategies of the recording media business, TDK has looked for ways to re-strengthen the manufacturing of recordable CD&DVD foundations from various perspectives. However, a sharp drop in market prices of recordable CD&DVDs as well as the increased cost of natural resources has led the recording media business in TDK to serious problems. After studies of measure for re-strengthening manufacturing, the decision of withdrawal from the manufacturing of recordable CD & DVDs that TDK management has made should lead to an improvement and reform of recording media business to change fundamentally the business model.
Keep in mind that TDK plans to contine to sell CD and DVD media. Instead of manufacturing their own, they'll buy it from a third party. If you'd like to read more, TDK's entire press release can be found here.