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The DVD market is drastically undersupplied as Japanese production of pick-up heads remains slow but demand for DVD-ROMs speeds up rapidly. Global demand for DVD-ROM peaked at 300,000 units a months between January and June, jumping to 900,000 in September as PC manufacturers increased their OEM orders. Observers say the shortfall should decline as supplies of pick-up heads grow quickly, and some analysts warn that ramping up DVD-ROM production now and early next year could lead to glut by late 1999. Executives from Acer Peripherals told the Nikkei that demand in the retail market may be well below the 80 million units forecast earlier this year, probably nearer 10 million. Acer said that retail demand for DVD-ROM remains 'relatively insignificant'. ®

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