AUO Merger With Quanta Display Creates World's Largest TFT-LCD Maker

HSINCHU, Taiwan – AU Optronics (AUO) and Quanta Display Inc. (QDI) on April 7 signed a merger agreement that will give AUO one of the industry's largest thin-film-transistor liquid-crystal-display (TFT-LCD) manufacturing capacities. The merger will take effect on October 1, 2006.

AUO, the world's third-largest manufac-turer of large-sized TFT-LCDs, and QDI, Taiwan's fifth-largest manufacturer of TFT-LCDs, will together achieve an area capacity of over 19% of the global market share, according to a state-ment from AUO. The new super-company, which will operate under the AUO name, will also immediately match the capacity of its Korean rivals and will have the world's highest consolidated capacity of Gen 5 and Gen 6 fabs, according to the statement.

According to market-research firm iSuppli, the merger would create the largest TFT-LCD panel company in the world in terms of market share, surpassing Samsung and LG.Philips LCD. Based on iSuppli's data for the fourthquarter of 2005, the new AUO would have accounted for 20.6% of the unit shipments, while Samsung had 20.26% and LG. Philips LCD had 19.74% of the market, respectively.

In addition, the new AUO will challenge Chi-Mei Optoelectronics (CMO) for the top position among Taiwanese LCD-TV panel makers, with an estimated 19.7% of the market, according to iSuppli.

"Owning two sixth-generation fabs will bestow some capacity advantages to AUO, especially in the 32- and 37-in. panel markets," iSuppli said in a statement issued on April 10. "The 32-in. panel is expected to be the dominant size for LCD TVs in 2006. Because 32 in. is the most efficient size for sixth-generation fabs, AUO's copious capacity at this level will help it to enhance its negotiation power with customers and as well as with component suppliers."

The iSuppli statement added that the merger could help stabilize pricing and slow price erosion in the TFT-LCD market, particularly in the PC and notebook monitor markets. "However, the merger also may intensify competition in emerging markets such as tele-vision, where gaining market share will become increasingly important for future success," the statement added.

Quanta Chairman Barry Lam stated that the strategic partnership combines the strengths of both companies, especially in technology, product mix, customer portfolio, and different generations of manufacturing facilities. The merger will enhance global competitiveness and offer an extensive product and technologyportfolio as well as better service, he continued.

AUO President H. B. Chen added that the said supply-chain consolidation will be essential to the purchase of key components and the close partnership with suppliers. Further, the research-and-development consolidation will expand the design expertise and solidify a robust intellectual property portfolio.

— Staff Reports


Kodak, Sanyo Liquidate Joint OLED Venture

ROCHESTER, N.Y. – Eastman Kodak Co. and Sanyo Electric Co. in February liquidated SK Display (SKD), their joint venture to mass-produce organic-light-emitting-diode (OLED) displays that was formed in 2001. While Kodak continues to invest in the OLED market and is building relationships with other companies to that effect, Sanyo will not continue its work with the burgeoning technology, representatives said.

"The bottom line is that the relationship that Kodak and Sanyo had was based on the competencies of each company," explained Kodak spokesperson Rogelio Sobers. "There was a growing positioning by Sanyo that said their interests in the display business in general were changing….As aggressively as Kodak wanted to move forward, we certainly needed to go down a different path, mainly because Sanyo was also going down a different path. That's just how it came to be."

Sanyo's path involves dropping out of the OLED marketplace and concentrating on other areas, including power solutions and personal mobile devices, according to the company's Mid-Term Business Plan released in November 2005.

"We are undergoing structural reforms and need to focus resources on our core businesses," said Sanyo representative Ryan Watson.

Under the terms of the split, Sanyo bought Kodak's 34% stake in SKD in early 2006 for an undisclosed sum, and SKD was dismantled on February 28, 2006. But Kodak will continue as exclusive licensing agent of any intellectual property developed during the partnership. SKD achieved mass production of OLED displays in 2003 with a 2.2-in. display for use in a Kodak camera sold in Europe and for Sanyo's HD1 digital movie camera.

Kodak's latest OLED partner is LG.Philips LCD, which Sobers called "very interested in OLEDs and committed to working with Kodak to help build the OLED market." LG.Philips LCD stated in February that the companies have entered an "evaluation agreement" for active-matrix OLED development.

— Jessica Quandt


Canon, Toshiba Announce Q4 2007 as Latest SED TV Rollout Date

TOKYO – After twice delaying production of the cutting-edge surface-conduction electron-emitter displays (SEDs), Canon, Inc. andToshiba Corp. announced in March that they will begin manufacturing the displays in July 2007 with the goal of being in stores in late 2007.

Canon and Toshiba unveiled a prototype of an SED television in September 2004, one month before forming their joint venture, SED, Inc. At the time, it was announced that the sets would be on store shelves in 2005. The launch date was pushed back to spring 2006, before the most recent postponement. SED, Inc. hopes this latest delay will give it time to drive down the cost of the novel technology before its release.

"After considering recent trends in the flat-panel TV market – a greater-than-expected decline in prices, expanding global availability – we determined that it was necessary to further rationalize our production processes and target further cost reductions as we prepare for mass production," explained Sean Collins, Toshiba America's Director of Business Development for Display Devices and Components. He added that specific pricing for the TVs has not yet been determined and that the first SED TVs will likely be in the 40–55-in. range. However, speculation in the industry is that the initial SED TVs are expected to be significantly more expensive than similarly sized liquid-crystal-display (LCD) and plasma TVs.

Toshiba wowed the crowds at the January 2006 Consumer Electronics Show with its display of three 37-in. SED prototypes, which each featured 2 million individual emitters, a contrast ratio of 100,000:1, and a response time of less than 1 msec, according to Toshiba. Those TVs were 720p, but those slated for commercial production are expected to be 1080p.

Company officials said the current launch date is scheduled to coincide with the 2008 Summer Olympics in Beijing. Canon and Toshiba will be launching a major sales campaign in the lead-up to the Games. They're also betting on the U.S. Government-mandated switch from analog to digital broadcasting in 2009 to bolster sales.

"Since the full-scale arrival of digital broadcasting has yet to occur, we believe that the market for flat-panel displays will continue to grow," Collins explained. "As such, we feel that new technology such as SED has room to penetrate the market. Further, SED technology, in terms of its superlative image quality and low power consumption, is the ideal display for coming market demand."

— Jessica Quandt


LG.Philips LCD Unveils 100-in. LCD

SEOUL, South Korea – LG.Philips LCD announced in March that it has developed a 100-in. liquid-crystal display (LCD). The display has a screen size that rivals today's largest plasma displays, and company representatives hailed the development as a testament to the ability of LCD engineering to overcome technological obstacles.

At 100 in., the LG.Philips display is slightly smaller than the world's largest plasma, a 103-in. model Panasonic unveiled at the 2006 Consumer Electronics Show in January. And it is approximately 1.5 times the size of the 82-in. Samsung model that has held the title of the world's largest LCD for the past year.

"This (100 in.) was a size that was considered a challenge to overcome," an LG.Philips LCD representative explained. "In the flat-panel industry, it was generally thought that LCD has more technological barriers in producing large-sized products compared with PDP (plasma-display panels). So, LG.Philips LCD's achievement is expected to serve as an example of overcoming these perceptions."

According to the company, the display measures approximately 2.2 m in width and 1.2 m in height, with a 180° viewing angle, 92% color reproduction, a 3000:1 contrast ratio, 6.22 million pixels supporting full high-definition (HD) programming, and a response time of less than 5 msec. It was developed in Paju, South Korea, at the P7, the largest seventh-generation substrate fabrication line in the world.

Using LG.Philips's copper-based interconnect technology, the display is capable of transmitting video signals across the entire screen without noise, creating sharp images with virtually no distortion or display jitter. According to LG.Philips, the company was the first to use the copper interconnects, which it also currently uses to manufacture high-resolution monitors and 47- and 37-in. full-HD panels.

While company representatives said there is no release date set for the mammoth LCD, they indicated its target customers will be in the public-information-display sector, "where the demand for large-scale products is growing."

"Technological advances for large-area LCD TVs, such as the 100-in. LCD, will act as a catalyst that accelerates customer demand for high picture quality and large screens," said Sang Deog Yeo, LG.Philips LCD Executive Vice President for Development Center, in a statement.

— Jessica Quandt


Display Briefs

Novalux has joined forces with Seiko Epson Corp. to develop and license RGB illumination devices based on Novalux's Extended Cavity Surface Emitting Laser (NECSEL) technology for use in microdisplay-based products. Novalux will license its RGB laser reference design and will supply Seiko Epson with the NECSEL semiconductor chips. Seiko Epson then plans to use the chips in developing optical engines for integration into its 3LCD projectors.

Bruce Berkoff has been named president and CEO of Oregon-based Enuclia Semiconductor Inc. Berkoff was previously executive vice president and chief marketing officer of LG.Philips LCD.

Scotland-based CRLO Displays has been renamed Forth Dimension Displays.

Micronic Laser Systems AB, a supplier of laser-pattern generators for photomasks, opened its new South Korean subsidiary on March 22 with headquarters near Seoul. Micronic Laser Systems Korea Co. Ltd. will conduct sales, installation and customer support operations in the local market. Chang Hee "Charles" Lee has been appointed as the president of the newly formed subsidiary.

Corning Inc. announced in early February that it will be making significant investments in liquid-crystal glass substrate manufacturing in China and Korea. Corning plans to invest $75 million in Samsung Corning Precision Glass Co. Ltd. (SCP), a joint venture with Samsung in which each company will continue to have a 50% ownership. Corning has also announced it plans to establish a new liquid-crystal display (LCD) glass substrate finishing facility in China, the first thin-film-transistor (TFT) LCD glass substrate production facility in mainland China.

Cambridge Display Technology (CDT) announced on February 13 that it has acquired a bundle of patent rights from Maxdem Inc., including five United States patent applications and their foreign equivalents relating to new light-emitting polymer compositions and applications. Also included is a license to a large number of patents and applications relating to polyphenylene polymers and other polymer compositions and purification methods. The newly acquired rights will eventually be transferred to Sumation, a joint venture formed in 2005 between CDT and Sumitomo Chemical.


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