One of the biggest news items to come out of Display Week in San Antonio in June was E Ink's announcement that it would be acquired by Prime View International (PVI) for approximately $215 million. E Ink is the main supplier of digital ink technology for e-readers (such as the Amazon Kindle), and PVI is a leading provider of small- and medium-sized displays and a major supplier of e-paper display modules. Together, E Ink, based in Cambridge, MA, and PVI, based in Taiwan, currently support nearly 20 e-book manufacturers worldwide.

"Combining E Ink and PVI creates a single public company that is dedicated to electronic paper," said Russ Wilcox, co-founder, President, and CEO of E Ink Corp. "With a common ownership structure, we can get closer to customers around the world, streamline the supply chain, and speed up new product development."

The acquisition, in other words, is a complementary one. E Ink can gear up to produce more in response to demand, and PVI now has closer access to E Ink technology. "For Prime View, it allows them to occupy a larger space in the e-reader supply chain," says Sarah Rotman Epps, Media Services Analyst with Forrester Research. Up until now, she explains, "E Ink has been the hub of the e-reader ecosystem." Its digital ink represents step 1 in the e-reader supply chain. Three companies have been involved in step 2, making backplanes for e-readers: LG, Chi Lin Technology, and Prime View, she continues. Step 3 involves "people like Amazon" and its manufacturing partners, which assemble the final products. "Now that Prime View has acquired E Ink," she says, "they essentially occupy steps 1 and 2 of the process. Instead of being one company in step 2, they are now a major player in steps 1 and 2."

In fact, the mutual benefits of the acquisition have led some critics to voice concern over a possible monopoly that could keep e-reader prices high and choices limited, says Rotman Epps. "But, personally, I think that demand with regard to both price and product will keep supplies plentiful [and reasonable] for consumers."

E Ink sales were $18M in the first quarter of 2009, up 157% over the same quarter in 2008. The company's future as a Massachusetts-based entity seems secure at the moment. At the press conference at Display Week last month, Sri Peruvemba, Vice President of Marketing at E Ink, said that the company will remain headquartered in Cambridge, Massachusetts, for at least the near future and plans to expand its employee base from 127 to 150 people during 2009.