"We plan to move fast as it will be better for our business," a Sanyo spokesman said of the plan to mass-produce optical pickups for the machines.

The spokesman said Sanyo would produce parts for the HD-DVD format, backed by Toshiba, and may also make parts for the rival Blu-ray standard promoted by Sony.

Sanyo controls a 40 percent share of the market for optical pickups for conventional DVD machines.

Blue lasers, key components for the optical pickups, will be manufactured at a plant in the western Japan prefecture of Tottori, with installation of assembly lines to be completed by mid-2005.

Sanyo also plans to make optical pickups at its existing production base in China.

Investment will total 10 billion yen (96 million dollars) by the end of March 2007, the spokesman said.

Next-generation DVDs have the potential to produce cinema quality and interactive images but their mass-market release next year could be overshadowed by the bitter battle between the two formats.

Walt Disney and its home video unit Buena Vista Home Entertainment announced Wednesday they would adopt the Blu-ray disc format backed by Sony, putting Disney at odds with an array of studios supporting the HD-DVD of Toshiba.

The Blu-ray Disc Association said in a statement it was "obviously very happy" with the Disney decision.

"We are excited to be able to draw from their vast and entertaining portfolio of content," the group said in a statement.

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