Re: Unauthorized use of manufacturer identification code on DVD/RW disc products

Thank you for your continued support and patronage of TDK.

TDK Corporation manufactures and sells optical discs, and the TDK name has become one of the world's most respected brands of recording media. TDK also boasts a full lineup of recordable DVD discs, a new product for which demand is expected to increase greatly, and TDK continues to develop and market high-quality products to fulfill the expectations and trust of our customers and to promote the healthy development of the DVD market. Recently, however, there have been reports of the production and sale of DVD discs that are not manufactured by TDK, but have TDK's manufacturer identification code, and we have confirmed these reports. As of July 3, confirmed products include SuperX and Princo brand discs. This type of improper conduct in violation of fundamental rules not only impairs the reliability of optical recording systems, but also shakes the very foundations of the market. We believe that incidents such as this will cause confusion and inconvenience to both consumers and recording drive manufacturers, and we would like to take this opportunity to explain our position.

The manufacturer identification code is a piece of information engraved into the stamper, the core component of the optical disc manufacturing system. It identifies the manufacturer of the disc. The code is used on the part of the recording drive to adjust itself to optimal recording settings depending on the disc type. The recording drive reads the manufacturer identification code on the disc and sets the recording method according to the properties of the disc in order to ensure compatibility between the drives and discs of various manufacturers and to maintain the quality of the recording signal. This is one of the underlying mechanisms of the system for ensuring reliability. TDK has cooperated with leading drive manufacturers. By reading the TDK manufacturer identification code, their drives can set the recording conditions to the optimal state on TDK discs. As a result, TDK DVD discs provide high-reliability and high-quality in the 2x recording speed mode as well as in the standard speed mode on DVD-R discs, ensuring high reliability to consumers and drive manufacturers.

We, however, have recently discovered that discs using someone else's manufacturer identification code are circulating in the market in violation of this fundamental rule. Specifically, some DVD-R and DVD-RW discs manufactured overseas with the manufacturer identification code identical to TDK's have been discovered in the market. These discs use the same manufacturer identification code as TDK's. TDK is not the source for the particular discs, stamper, or materials for these discs, and the appearance of the inner disc, the lot seal and other details are different from those of authentic TDK products, indicating that these products were manufactured without TDK's authorization. Thus, even if these discs are recorded using the optimal settings for TDK products, the chances are that they do not meet the applicable quality standards. Even though the discs are not officially approved by hardware manufacturers, disc drives would try to record in the 2x speed mode as it detects the TDK manufacturer identification code, resulting in poor quality when the recorded data or images are retrieved.

TDK has voiced objections in the strongest possible terms to the parties involved in both manufacture and distribution of such discs concerning the unauthorized use of the TDK manufacturer identification code in violation of the fundamental principles for ensuring reliability. Considering that this type of conduct is detrimental to the entire industry, TDK has explained the situation to industry groups such as the RW Products Promotion Initiative and other involved parties and has confirmed the facts. TDK intends to take a firm position against the unauthorized use of manufacturer identification codes in order to prevent any inconvenience to our customers.

TDK will make every possible effort to maintain its brand that is trusted and relied upon by its customers. We look forward to your continued support in the future.

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