Taiwan disc makers up on Toshiba plans to end HD DVD format

TAIPEI (Reuters) - Shares of Taiwan's major disc makers surged after Japan's Toshiba Corp (6502.T) said it plans to give up its HD DVD business after losing the support of key retailers.

CMC Magnetics (2323.TW), which supplies about a third of the world's DVD output and counts Sony Corp (6758.T) as a major client, rose 6.92 percent to T$9.73 at 0306 GMT, outperforming the benchmark TAIEX index, which advanced 0.37 percent.

Ritek (2349.TW) and Gigastorage (2406.TW), also disc makers, rose the daily 7 percent maximum on Monday after Toshiba told Reuters that it plans to exit from the HD DVD business.

Toshiba had been battling Sony for next-generation DVDs, and investors cheered an impending end to a format war between the two Japanese vendors.

"Everyone had been waiting to see who will win the format fight, so if Toshiba really exits, then it could really take off for Sony," said Sammy Lo, a spokeswoman for CMC.

"Right now the demand is still small for HD DVD, but we expect to see huge growth in the area this year," she added.

(US$1=T$31.72)

(Reporting by Sheena Lee, editing by Ken Wills)