Prime View International, HYDIS Technologies, and LG Display Announce Comprehensive Cooperation Agreement

by Jenny Donelan

The e-paper industry infrastructure continues to evolve, as is evidenced by the recent announcement of an agreement among Prime View International Co., Ltd., HYDIS Technologies Co., Ltd. (a subsidiary of PVI), and LG Display Co. Just before the new year, the companies reported that they planned to launch a "comprehensive cooperation" with regard to technology, capital, and sourcing in order to co-develop products for the global display market.

The agreement will, in essence, allow the above parties to make more e-paper products. While capacity is not currently constrained, signs point to a considerable increased demand for eBooks in the years to come, with unit sales more than doubling from 2009 to 2010, according to recent figures from market-analyst iSuppli (see "What's Next for E-Readers," also in this issue). Now, PVI/E Ink will have LG Display as a customer for E Ink's Vizplex imaging films. In turn, LG Display will have access to technology from E Ink, which is now owned by PVI, and also to HYDIS's fringe-field-switching (FFS) technology. HYDIS is a Korea-based display maker for which PVI is a majority owner; FFS enables a wide viewing angle for LCDs used in mobile phones, laptops, and gaming machines.

These arrangements represent a deepening of already-existing relationships among all the above e-paper players. PVI, which manufactures small- and medium-sized LCD modules, and describes itself, no doubt accurately, as "the world's largest supplier of e-paper display modules," acquired E Ink in 2009. E Ink makes the electronic ink that forms the basis of most of the e-readers on the market, including the Barnes & Noble Nook, Amazon Kindle, and Sony Reader. The PVI/E Ink deal was announced in May 2009, and completed on December 23, 2009.

LG Display, a major manufacturer of TFT-LCD panels, also has connections to the above parties. "LGD has been making some backplanes for [E Ink-based] e-readers, though PVI was doing most of them," says Vinita Jakhanwal, principal analyst with iSuppli. LGD invested $10 million in PVI's GDR (global depository receipts) issuance in December 2009, when, as part of PVI's acquisition of E Ink, PVI raised funds in the equity market by offering GDRs (which raised $165 million). As part of the new agreement, LG Display will invest in HYDIS technology through $30.5 million in corporate bonds. Both companies have also entered into a cross-license agreement, which includes the FFS. According to the recent announcement, the two parties will also mutually support production capacity on "certain e-paper and high-end TFT-LCD products." And LG Display will provide consulting to HYDIS on production efficiency and quality.

All the above moves make sense, according to Jakhanwal, who says that LGD's factory facilities will add considerably to PVI's ability to turn out products. In addition, she says, all these agreements set up PVI/LGD to be more competitive with major LCD manufacturer AUO, which acquired access to SiPix Imaging's electronic-ink technology (a competitor to E Ink's) last year. •