Touch International Aims for Increased Market Share with Purchase of Resistive Touch Equipment from 3M

METHUEN, Mass. - In a move that could significantly increase its presence in the touch-screen market, Touch International Inc.(TI) has purchased manufacturing equipment and designs from 3M Touch Systems for its specialty resistive touch-screen product line, located in Vancouver, Canada. The agreement, announced in late June, also allows Touch International to hire former 3M Touch Systems employees and take on 3M customers serviced by the specialty resistive touch line, which is currently in the final stages of an end-of-life program.

"We are growing so rapidly all over the world right now, but Canada was the next logical step for us," said TI spokesperson Anne Ahola-Ward. "The 3M facility in Vancouver has an extremely high level of customer satisfaction producing complex touch/membrane switch panels. The facility employs sophisticated automation and custom designs for this type of product. TI will retain this skill set to continue to manufacture these parts."

3M Touch Systems decided to shift its focus to the development and expansion of its capacitive-based touch technologies and electronics in the second half of 2006, according to company Communications Manager Tim Holt. In order to shift the company's focus, the company planned to phase out its 4- and 8-wire polyester laminated "specialty" resistive touch products, manufactured in Vancouver and Milwaukee, Wisconsin, through an end-of life, last-time-buy program for its customers by the end of August 2007.

But with the sale of 3M's equipment to Touch International, these customers will now be able to continue purchasing the same products through TI.

Effective September 1, the sale will allow TI to produce resistive touch screens using the same process as customers had qualified with the same people making the product in the same Vancouver location, according to CEO Michael Woolstrum. Designs owned by 3M Touch Systems will transfer to TI, and custom designs owned by individual customers will transfer only with customer permission.

Though neither 3M nor TI would comment on how much this announcement would affect TI's production capacity, Woolstrum did say the company expects its market share to grow.

"The specialty resistive touch-panel market requires an understanding of mechanical, chemical, and optical sciences, and far fewer companies are able to provide this type of product," he explained. "With the acquisition of the 3M Vancouver output, TI estimates it will have a 35% share of this market."

According to industry research group iSuppli Corp., global shipment revenue for the leading touch-screen technologies, including resistive, will hit $4.4 billion by 2012, up from $2.4 billion in 2006. Though the company does not rank individual touch companies and does not release specific market share percentages, Senior Analyst Jennifer Colegrove confirmed that Touch International is already one of the "big players" in the American market, along with 3M Touch Systems and Elo Touch.

On June 19, iSuppli released a touch-screen report showing two-thirds of the touch-screen manufacturers are involved in resistive technology, creating a highly competitive market. Because of such fierce competition, the research group forecasted that a number of mergers and acquisitions would take place in the very near future.

"Just as we predicted, there will be mergers and acquisitions of resistive touch screens: Touch International bought the 3M resistive-type equipment," Colegrove said. "This definitely will increase Touch International's volume and market share, and may allow (the company) to gain some old 3M customers."

According to Woolstrum, TI has already taken on a number of 3M resistive customers, and is encouraging more to follow suit. However, TI's goal is not to become the dominating force in the touch-screen market, explained Ahola-Ward.

"This acquisition will allow us to expand our presence in Canada and continue to serve our customer while gaining new ones," Ahola-Ward said. "Whether or not we are bigger than Elo or 3M isn't our concern. Touch International strives to be No. 1 in the markets that we serve."

— Jessica Quandt


LG Electronics Announces Countersuit AgainstHitachi Over PDP Intellectual Property

Several months after Hitachi took LG Electronics (LGE) to court alleging patent infringe-ment, LGE announced it will countersue Hitachi in order to protect what it says is its own intellectual property.

Hitachi Plasma Patent Licensing Co. Ltd. (HPPL, a subsidiary of Hitachi) initially sued LGE in U.S. District Court in Texas in late April 2007, alleging LGE's plasma-display products infringed upon seven of HPPL's patents. HPPL announced it would seek monetary damages as well as a permanent injunction keeping LGE from using the patents in question and from importing the products in question into the United States. Representatives from the two companies could not confirm specifically what those products are.

On June 18, LGE announced it would countersue Hitachi and would also seek an injunction on patent infringement of LG's plasma-display-panel (PDP) technology and monetary compensation. According to a press release issued by LGE, LGE's claims include four patents related to methods for driving PDPs and three patents related to apparatus and cell structure of PDPs. A representative from Hitachi cited the company's policy of not commenting on ongoing litigation.

"Intellectual property is one of LG's essential assets, which we will always uncompromisingly protect," Jeong Hwan Lee, Executive Vice President and Head of LG Electronics' Intellectual Property Center, said in a statement released to announce that company's countersuit. "Japanese firms are filing more and more lawsuits as competition in the global display market has increased dramatically. We will proactively deal with the situation based on our patented and patent-applied-for technologies."

According to the same release from LGE, "The case is a result of a difference of opinion over the proprietary nature of each company's PDP technologies."

— Jessica Quandt

Sharp to Open Gen-10 TFT- LCD Plant, Sources Say

OSAKA, Japan - Sources within Sharp Corp. have confirmed published Asian reports that the company is planning a Generation-10 liquid-crystal-display (LCD) fab that will produce 65- and 57-in. panels. Sharp has yet to make an official announcement.

"Sharp has been considering (building) a new LCD panel plant, however, the details are not decided yet," the company said in a press release dated May 19. "Sharp will make a decision by summer."

A company executive said he could not confirm the rumor until an official statement was made, and did not know when the announcement would come. Still, those who watch the market closely are anticipating the news will come eventually.

"We hear from equipment makers that the 2880 x 3080 mm substrate size has been set for Sharp's next fabrication plant," commented David Barnes, Vice President of Strategic Analysis for display market research company, DisplaySearch.

A decision from Sharp to use a 95-sq.-ft. glass substrate for mass production of TV panels would have three major implications, according to Barnes.

"If production starts in Q2 '09, it will reverse a trend of increasing industrial concentration among TFT-LCD (thin-film-transistor LCD) makers that persisted from 2000 to the present," Barnes said, explaining that there were about 11 producers in 2000 but only about 7 in 2006. "If Sharp brings a so-called Gen-10 plant online in 2009, competitive rivalry will increase toward 8 equivalent producers. Other factors remaining constant, increased rivalry should increase the intensity of price competition."

Using such a large substrate could also mean Sharp would have to make a decision soon about whether or not to produce panels of 42 inches and smaller, Barnes continued.

"Such a large substrate size will constrain the number of panels smaller than 42 diagonal inches that the fab can produce….This implies that Sharp will make panels to support its TV brand, rather than compete in the merchant market for LCD modules," he said. "The selected glass size supports 10 47-in. panels, 8 57-in. panels, and 6 67-in. panels. Larger display sizes, such as 120 inches for public display applications, could be fabricated as well. It seems, therefore, that Sharp hopes to improve its own brand position by offering larger displays than other companies might offer. In order to compete in the marketplace, Sharp will probably squeeze 42-in. panel sizes into a commodity position, thereby reducing the value of its competitors' capacity."

Finally, a move to Gen-10 substrates and the problems associated with transporting them would necessitate greater cooperation and interdependence among panel makers, material suppliers, and equipment vendors, Barnes said. For example, the company's glass supplier and equipment vendors likely would have to set up facilities on site at the new Gen-10 fab.

"This would require a high level of coordination and would limit the choice of vendors for some equipment types," said Barnes. "Such co-destiny may change the competitive/cost dynamics seen in prior generations of substrate selection. A brand-centric business plan might make such trade-offs acceptable; a merchant-centric business plan might not."

— Jessica Quandt

Supplies of Indium, Element Critical to LCD Production, Continue to Shrink

Liquid-crystal-display (LCD) panel makers continue to increase production capacity worldwide to meet the ever-growing demand for LCD TVs. But while demand for LCDs increases, recent evidence has shown that the Earth's supply of indium, a naturally occurring element critical to LCD technology, may not be able to keep up.

Scientific journals have been reporting for several years on the rising cost and apparently shrinking supply of the element indium, an element in the Earth's crust that is produced predominantly in China, Canada and Japan. According to the U.S. Geological Survey (USGS), about 70% of the world's supply of indium is purchased and used by the LCD industry, which uses indium tin oxide (ITO) as a transparent conducting coating in LCD panels for computer screens and TVs. By 2011, LCD TV shipments worldwide will have swelled 30%, according to industry research group iSuppli. And increased production will lead to a greater demand for ITO.

A May article in the British publication New Scientist found several natural elements, including indium, are being used up at "an alarming rate." The article cites the work of Dr. Armin Reller, a materials chemist at the University of Augsburg in Germany, who predicted that supplies of indium could be exhausted by 2017, and that the world's supply of zinc (of which indium is often a byproduct) will be gone by 2037. Reports from the USGS seem to add sway to the idea that the LCD industry is using indium more quickly than the current supply can sustain.

"Continued strong sales of flat-panel displays and other LCD products increased global consumption of ITO, mostly in Japan, the Republic of Korea, the Philippines, and Taiwan," according to USGS Mineral Commodity Summaries from January 2007. "With the increasing capacity of ITO refineries and LCD plants (in these countries)…the availability of primary indium feedstock will be further reduced."

Large-scale recycling of used ITO has proven problematic as well—it is a long, costly process that could be hindered by environmental legislation, according to the USGS.

In the short-term, the growing demand for and shrinking supply of indium have begun to dictate a higher price tag for the element. By 2006, the average annual price of indium was $855 per kilogram, up from just $97 per kg in 2002 and $170 per kg in 2003, according to the USGS report.

In 2003, there was actually a surplus of indium with 610 metric tons produced worldwide and a demand of only 513 metric tons, according to an independent study from indium dealer AIM Specialty Materials. But this year, the AIM report estimates the demand for indium will outweigh the total supply by about 324 metric tons. For 2008, AIM expects demand to exceed supply by 444 metric tons. Even after factoring in the surplus from 2003, the cumulative deficit of indium for 2003-2008 is estimated to hit 969 metric tons.

Mining Companies Not Concerned

While this disparity between supply and demand seems sharp, mining companies are confident that there is still no real cause for concern in the long-run.

"Yes, the (969 metric-ton deficit) increases strongly (from 2003 to 2008), but it is cumulative," explained Jack Marr, Vice President of Exploration for Canadian mining company Geodex Minerals Ltd. "There would be no real input from new mine sources in this period."

The lack of new sources is something Geodex is hoping to eventually remedy. The company has recently confirmed the presence of zinc and indium at its Mount Pleasant site in New Brunswick, Canada.

"We are concerned about the shortage of indium, but it is a favorable feature for us since we are focusing our exploration in New Brunswick on the most indium-rich area in the world, namely around the old Mount Pleasant mine," Marr explained. "As always happens, more exploration will lead to further supplies. Indium is not a rare metal. It occurs in the Earth's crust at about the same levels as silver. However, the problem is short-term supply since new mines and processes take years to come to fruition." While the company has many projects in the New Brunswick area, which it believes to be "particularly enriched" with indium, Marr explained that Geodex has no defined mine yet and therefore has not yet started worrying about metallurgical processes and recoveries of indium.

Companies that work directly with the element also seem relatively unfazed by the threat of a shortage.

"There is nothing to worry about," said Rod Waters, CEO and owner of Laserod Inc., which patterns ITO coatings on glass and plastic substrates. "Name a resource the Earth ever ran out of. The law of supply and demand is why. Supply runs low or demand rises, or both, and what happens? Price rises, exploration hastens, discoveries arise, problem solved."

Alternatives Sought

In the event that indium supply isn't able to keep up with demand in the long run, a handful of companies have already begun working on alternatives to ITO. California-based Unidym is currently developing transparent carbon nanotube (CNT) technology that the company believes could eventually become a feasible alternative to ITO in many of its applications.

"The price of ITO started to rise significantly around 2000. Equally significant was the emergence of new electronics applications—large-area solar cells, larger and larger displays—and it was obvious that the total acreage of transparent coatings is going to increase significantly in the future," said George Gruner, Unidym's founder and chief scientific officer, of when and why he saw the need to develop an ITO replacement. "A network or film of the extremely well conducting (carbon) nanotubes is inherently transparent, and early optical experiments starting in 1999 clearly identified that the material has the appropriate technical parameters: low electrical resistance and high optical transmittance. Thus, ITO replacement was clearly an opportunity."

While Gruner said Unidym is "realistic" about the time scale when it comes to convincing manufacturers to integrate a new technology into their multi-billion-dollar fabs, it is currently working with companies that it hopes will be early adopters, identifying touch screens as the first application opportunity.

"In the long run, with large-area solar cells, solid-state lighting covering larger and larger areas, and the emergence of macro-electronicssuch as large electronic billboards, ITO is bound to be replaced by alternatives," he added.

— Jessica Quandt

Display Briefs

Universal Display Corp. (UDC) announced on July 12 that the U.S. Department of Energy (DOE) had awarded the company two new Small Business Innovation Research (SBIR) Phase I grants totaling $200,000 to develop WOLED white OLED technology for future solid-state lighting applications. With the first DOE grant, Universal Display said it would work to develop white PHOLEDs with a stacked architecture. The stacked architecture will be based on the SOLED stacked OLED technology that was previously pioneered by Universal Display and its academic partner, Princeton University. The second grant also focuses on demonstrating white PHOLED performance advances.

LG Electronics (LGE) began 8-up processing on its A3 plasma display panel (PDP) line on July 2, maximizing the company's PDP production capacity by allowing LGE to produce eight PDPs (rather than the current six) from one sheet of glass substrate, according to a press release. LGE said the improved 8-up processing will increase its total monthly capacity by 22%, from 360,000 to 440,000 panels, greater than the total capacity before its A1 line was shut down. The company said its strategy to raise efficiency entails increasing per-line capacity while closing older, less efficient lines. In addition, glass substrate sheets used for LGE's 8-up PDP production will be increased to 1,956 x 2,200 mm in size, compared to glass sheets of 1,956 x 1,650 mm in size used for 6-up processing.

Acacia Research Corp. announced on June 29 that IP Innovation LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, has entered into a license and settlement agreement with LG.Philips LCD (LPL), covering patents that apply to Audio/Video Enhancement and Image Resolution Enhancement technologies. The agreement with LPL resolves a patent infringement lawsuit which was pending in the United States District Court for the Northern District of Illinois, Acacia said in a press statement.

Sensitive Object and Tyco Electronics' Elo TouchSystems business have signed a cross license agreement in order to further the development of their technologies and expand their respective product offerings, the two companies announced on July 10. Sensitive Object and Tyco Electronics, both working in the field of acoustic touch recognition, said they have both recognized the commercial benefits of sharing the results of their own research and development programs. The two companies have agreed to cross license their intellectual property in the acoustic touch field and to enter into a mutual technology development program.


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