Nowhere to Hide?

by Steven P. Atwood

It would be unrealistic for me to ignore the dreadful economic conditions we are facing in all areas of the display industry. Discouraging news seems to pour in almost every day about layoffs and cutbacks, and it seems that almost no one is immune. I cannot bear to look at the stock market and I am fearful just opening up the regular trade news.

Most recently, we learned about the truly devastating losses and subsequent job cuts at Pioneer from our friends at Insight Media (Display Daily 2/16/09). Pioneer's high prices for arguably superior products could not be sustained in this now very selective consumer marketplace, where the difference between good and great was just not enough to get customers to spend above average for their TVs and other entertainment devices. Certainly, all major manufacturers are battling heavy downward pressure on margins, but Pioneer apparently was not able to respond enough to keep its share in the declining overall market, making the impact much greater to its sales on a percentage basis. The result, as we can see once again, is that superior technology by itself cannot overcome the brutal forces of the marketplace.

Another company that has seen very difficult pressure on its businesses is NEC, whose industrial LCD business has also experienced dramatic reductions in sales. Therefore, we were not shocked a couple of weeks ago to hear that NEC could be planning to exit the LCD-panel business entirely. Even so, the news was sobering because a significant part of the marketplace for industrial and specialty displays relies on NEC's unique offerings, some made on trailing-edge fab lines and supported for 10 years or longer without major revisions. Companies making displays for the military, avionics, medical, and other specialty markets rely heavily on NEC and others to provide panels with long product life cycles and limited form, fit, and function changes. These markets demand that the products be certified for mission-critical reliability, that they perform under extreme environments, and that they offer intrinsic safety to protect life and limb. Any changes to the product design, including the display panel, become an expensive proposition for the developer to re-certify. However, producing these panels is relatively expensive and represents a heavy burden on NEC's operations, which must manage high-mix lower-volume products at the same time that its rivals are trimming all but their best-performing products.

Losing the panels NEC provides would have had a significant impact on revenues and jobs for many of NEC's customers and created another serious economic ripple throughout the industry. I say "would have" because, as it turns out, the news was not true and was vigorously denied by NEC officials. Still, the rumors would not die and over the next week NEC's PR team fielded numerous phone calls and angry inquiries, (see our Industry News segment further herein). During the month of February, my cell phone literally rang at least once each day with calls from media people or friends wanting to talk about the NEC rumor. I counted well over 100 e-mails on this subject alone, mostly links to numerous Web sites in Japan. The stories have finally died down, and it is not clear whether they were pure fiction or whether NEC's management did at some moment seriously consider shutting down the LCD business. In any case, the incident served as a bellwether for just how precarious things are right now, and how sensitive everyone is to each new bit of potentially bad news.

However, not all the news is bad, and I hope that in this issue you can join me in hiding from the bad news with some great technology stories, at least for a little while.

I'm proud this month to introduce three great articles about the latest innovations in ultra-low-power LC and electrophoretic displays, solicited and edited by our Guest Editor Rob Zehner from E Ink Corp.

If you have not seen electronic shelf tags in your area yet, I'm betting you will soon. Dr. Cliff Jones from ZBD Displays Limited introduces us to new technology for making bi-stable ultra-low-power LCDs that can display relatively high total information content entirely on embedded batteries that can last for years. It may not be sexy, but the total market for these displays is almost beyond counting and the value model for retailers is very compelling. This is an application that is getting very close to having its solution at the ready. If it enables a business advantage for even a few retailers, it could become virtually pervasive almost overnight.

Meanwhile, if larger sizes are your interest, the article on large-area cholesteric displays by David Coates of Magink will certainly get your attention. David reveals the latest efforts in making very large billboard and stadium-sized displays based on bi-stable cholesteric technology, the stuff that groups like Kent Displays has been researching and demonstrating for decades now. I must admit, this was not on my radar and I was really surprised to see how much effort was being invested in this direction. I thought LEDs would own the space for a long time, but now I think we have a competition.

Our third feature on the latest advances in electrophoretic display technology is co-written by Joanna Au of E Ink and Kawano Shigeaki of Epson Corp. and shows us some whimsical applications as well as a very promising and practical enabling influence on smart-card technology. Electrophoretic technology has received a lot of much-deserved attention lately, and the future looks very bright for those that have stuck it out for so long, including our respected and very diligent colleagues at E Ink.

So, while there may not be any way to totally escape the bad news, there are places to hide, at least temporarily, and inspiration to be found. Despite the hard times, innovation is still alive and well in the display world. •