The copies first appeared in Malaysia last Friday - only two days after the US opening - and experts say the disks are rapidly making their way to other parts of Asia, and even to Europe, South Africa and Latin America.

The "Star Wars" film has broken the previous record for fastest pirated release, held by the Sean Connery movie "Entrapment," which appeared on Asian CD racks seven days after its US debut.

"This shows how amazingly efficient this industry has become," says Michael Ellis, the Asia anti-piracy chief of the Motion Picture Association. "They've gotten it down to a sophisticated science."

Granted, the copiesthemselves are still low-quality and give new meaning to the term "home cinema." Most were shot in US theaters with handheld video cameras. Some show audience members getting up to go to the bathroom, while others feature loud clapping and shouting. In one version, purchased in Singapore, an audience member yells "Yeah, wooo!" throughout the opening sequence.

Asian buyers, however, don't seem to mind -- especially since the film isn't scheduled to open in the region until July. "It makes you feel like you're in the theater," says one buyer named Andi, grabbing two copies of the film in Jakarta, Indonesia's Manga Dua Mall, where many shops were sold out of the film. "It's also cheaper, and I don't have to wait months to see it."

In downtown Jakarta, street hawkers were selling "Phantom Menace" alongside their usual fare of noodles and rice. At the bustling Sungei Wang shopping complex in Kuala Lumpur, Malaysia, a small crowd gathered around a TV set to watch the opening fight scene with Obi-Wan and thedroids. The shop owner, who declined to be identified, says he sold 50 copies in two days -- a decent take but not yet approaching his best-seller, "A Bug's Life," which sold 4,000 copies over the past few months.

In Hong Kong, versions of the film are already appearing with Chinese subtitles -- a process that usually takes weeks. At a computer mall in Mong Kok, just outside of Hong Kong's central business district, retailers are selling "Phantom" for as little as $2.50. One customer, a confessed " `Star Wars' fanatic" named Derek, says he simply couldn't wait for the film to come out in theaters.

Most of the "Phantom Menace" copies are being sold in CD-size jewel boxes with photos of the movie poster on the cover. Some shops are selling the film as part of a "Star Wars Pack" that includes pirated versions of the newly launched "Star Wars" computer games. At one small shop in Singapore's Sim Lim Plaza, the film and two "Phantom Menace" computer games were selling as a set for $15.

It's unclear exactlyhow the smugglers got the disks on the market so fast. Most of the copies sold in Asia appear to have come from three separate "master" versions, or digital tapes filmed in the US. The copies were probably shipped via air courier to Malaysia and Hong Kong, where they were transferred to VCD-production lines in Malaysia.

A spokeswoman for Lucasfilm Inc., makers of the "Star Wars" movies, says "this is an industrywide problem" that is being handled by the Motion Picture Association in conjunction with the Federal Bureau of Investigation. A spokesman for News Corp.'s Twentieth Century Fox Inc., which is distributing the film, had no immediate comment. To date, "Phantom Menace" has brought in $132.5 million at the box office.

With advances in technology and a continued thirst for US films abroad, pirate-video making has become big business. Last year, Hollywood incurred $557 million in lost sales to video pirates, according to the Motion Picture Association. Officials seized 42 million illegal video copieslast year, up nearly tenfold from 1997. Asia remains by far the biggest producer and consumer of pirated films.

New production methods have made video pirating easier and cheaper than ever before. Whereas a pirated VCR tape has to be recorded in real time, taking up to two hours for each copy, a videocassette disk can be stamped out in three seconds. Manufacturing lines have become so simple and inexpensive -- basically just a CD stamper and master-tape maker -- that producers can crank out hundreds of thousands of VCDs a day from a small shop at less than 15 cents each. The VCDs are then distributed by air courier, truck, van and even bicycle to Asian retailers.

In Asia, the videodisk market has exploded, mainly because pirated movies are so cheap to buy. Consumers can buy a VCD player in Asia for under $100, and movies are typically less than $5. VCRs and VHS tapes have become virtually obsolete in the region.

But "Phantom Menace" set a new standard for the industry. Typically, pirated films are madefrom one or two masters. "Phantom Menace" is being generated from at least three masters, insuring a wider and faster release.

`Big release'

"This tells us that there could be three syndicates putting out copies, or that it was one syndicate buying several versions," says the Motion Picture Association's Ellis. "Either way, having three masters made for a big release."

Two of the versions appear to have been shot in crowded theaters. One version, however, is free of audience noise and may have been a "midnight shoot," meaning a cinema gave a private viewing for the pirate film maker. Oftentimes with a midnight shoot, a pirate video maker will set up a tripod to steady the camera and pick up the sound directly from the theater's sound system to get movie-quality sound. None of the "Phantom Menace" copies, however, appear to have used tripods or sound plugs.

Officials suspect that most of the copies were produced in Malaysia. With its lax law enforcement, low labor costs and central location inAsia, Malaysia has become the new hub of the pirate CD industry.

Retailers in Singapore and Jakarta both say their copies came from "KL," or Kuala Lumpur. Officials add that the first copies of the film to appear in the region were in Kuala Lumpur's Bangsar district, a bustling street of VCD stalls, bars and restaurants.

Whereas Hong Kong, China and Macau were once the capital for pirated products, recent crackdowns in those areas have chased the industry south. Malaysian officials have been told repeatedly of the violations, but little action has been taken. Experts say most of the factories that produce the films in Malaysia are legitimate CD makers that produce pirate products onthe side.

"They say they're going to take care of it," says Ellis. "But nothing has really changed."

Douglas Appell contributed to this article.