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Taiwan firm buys e-paper supplier for $215M

Posted: 03 Jun 2009 ?? ?Print Version ?Bookmark and Share

Keywords:electronic paper? e-paper? flexible displays?

Taiwan supplier of small- and medium-sized displays Prime View International (PVI) is set to acquire electronic paper display technology pioneer E Ink Corp.

PVI has bid about $215 million for all the assets of E Ink, and said the combined group will "expand capacity and develop improvements for e-paper display screens that are easy on the eyes, long-lasting, and highly portable."

Scott Liu, chairman and CEO of PVI, said: "The world is searching for green technology that saves energy and cuts waste and still provides an outstanding experience. E Ink's electronic paper meets those needs, especially in electronic publishing and mobile displays. The people in both companies will unite to provide the world's best digital reading experience."

The deal is the latest in PVI's strategy to transform the company and focus on e-paper displays. In 2005, PVI acquired the e-paper business of Philips Electronics and partnered with E Ink to provide displays for electronic books including the Sony Reader and the Amazon Kindle 2 and Kindle DX. PVI also invested heavily in dedicated driver chips and touchscreens for e-paper, as well as flexible displays, which will be marketed later this year.

Last year, the group bought a 74 percent stake in Hydis Technologies of Korea, quadrupling capacity for the transistor backplanes used in e-paper.

With the move, PVI gains substantial intellectual property and employee talent, while securing supply of a critical component. Meanwhile, E Ink will get access to increased operating funds to boost production and accelerate new technology and product developments.

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

E Ink will remain headquartered in Cambridge, Mass. and plans to expand its employee base from 127 to 150 people during this year.

PVI will finance the acquisition with an equity placement and a convertible bond offering led by Taiwanese securities firm KGI. The transaction is subject to shareholder and regulatory approvals and is expected to close in Q4 09.

E Ink sales were $18 million in Q1 09, up 157 percent over the same quarter in 2008.

Analysts' take
In a supporting statement, Jennifer Colegrove, director of display technologies at analyst group DisplaySearch, said: "The e-paper display module market will grow to over $3 billion by 2013. This market will see further growth with the emergence of color displays and flexible displays, serving eBook/eTextbook, eNewspaper/eMagazine and eDocument markets. Currently, electrophoretic display technology has more than 90 percent market share in the overall e-paper displays, and E Ink is the number one supplier of electrophoretic materials."

Another analyst, Vinita Jakhanwal of iSuppli, added: "The market for electronic book devices such as the Sony Reader and Amazon Kindle is forecasted to grow from 1.1 million units in 2008 to 20 million units in 2012, a cumulative annual growth rate of 105 percent over the four-year period. PVI and E Ink enabled this market back in 2005 and they have been the display market leaders ever since." E Ink and PVI currently support nearly 20 eBook manufacturers worldwide. In addition to electronic books, E Ink's Vizplex imaging film is used in cellphones, signage, smartcards, memory devices, and battery indicators.

- John Walko
EE Times Europe

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