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Rodney Chan at Digitimes has the scoop on a hugely significant development for ePaper. An Alliance has just been announced between -

1. Prime View International (PVI), the eInk screen supplier for the Kindle, the Sony Reader, and the Nook.
2. LG Display, the world’s second largest LCD maker. LG and Samsung Electronics control nearly half the global LCD market.

It involves a $30.5 million dollar investment by LG Display in PVI subsidiary Hydis.

Details on the PVI, LG Display Alliance and PVI’s plans

The PVI and LG Display Alliance

There are some really interesting details on the Alliance -

Hydis (a PVI subsidiary) will issue US$18.3 million zero coupon bonds and US$12.2 million bonds with coupon rate of 4% to LGD, PVI said in a filing with the Taiwan Stock Exchange (TSE).

Hydis and LGD have also entered into a cross-licensing agreement to grant each other certain patents, PVI said without disclosing the terms and conditions.

The Financial Times has a good article and adds these snippets -

LG Display has earlier this month invested $10m for a 0.5 per cent stake in PVI.

LG Display will work with two PVI subsidiaries – Massachusetts-based E Ink will supply e-paper to LG Display, Flat-panel maker Hydis Technology will work with the Korean company to develop future e-paper display modules.

FT points out that LG Display isn’t the only company striking up partnerships with ePaper (to be precise electrophoretic display) manufacturers -

Taiwan’s Chi Mei Optoelectronics last month announced a similar partnership with PVI, and AU Optronics earlier took a 31.6 per cent stake in SiPix Imaging, which uses a rival technology to E Ink to produce e-paper.

PVI is getting ready to quadruple its capacity by Q3, 2010

Digitimes talks about PVI’s plans to expand its EPD display capacity by 3 to 4 times in the second or third quarter of 2010 -

PVI announced on December 23 that it has completed the acquisition of E-Ink.

With support from E-Ink and Hydis, as well as from Chi Mei Optoelectronics (CMO), PVI’s output will be able to meet the expected surge in demand in 2010, Liu noted.

50-60% of Hydis’ capacity will be used to make EPD panels in 2010, and PVI will also have support from CMO’s 5G lines, Liu said.

The alliance with LG Display gives PVI more options for where they can manufacture their EPD panels, more financial backing, and perhaps even new insights to cut costs and add capabilities.

The Immense Ramifications of the PVI, LG Display alliance

This is really huge news -

1. We’re talking about the second biggest LCD maker in the world – That means lots of expertise, lots of manufacturing capacity, and lots of financial backing.
2. It ought to result in the end of supply problems. Which would really help given that Kindle DX, Nook, and Sony Reader are all out of stock at the moment.
3. It ought to lead to cheaper eInk screens. There have to be a few cost cutting tricks LG Display can share with PVI.
4. It validates eInk technology, PVI’s position, and ePaper in general.

How soon will we see the benefits?

We ought to start seeing some benefits in the next couple months i.e.

1. PVI can take bigger risks in terms of manufacturing a much larger number of displays.
2. LG Display will probably help PVI’s subsidiary Hydis ramp up its production capacities.

It’s over the next 6 to 24 months that the really significant improvements will happen -

1. LG Display’s expertise and experience will kick in and bring down prices.
2. LG Display will probably release a lot of different eReader screens. They had demoed a solar powered eReader earlier this year.
3. The possibility of using LG Display’s OLED technologies in new lines of eReaders.
4. Investments into ramping up production lines will mean a lot more capacity - enough to meet the hoped for growth in eReader demand. 
5. Lots more investment into eInk technology and perhaps patents from LG Display leading to new eInk breakthroughs.

It makes you wonder, again, why Cambridge, MA based eInk sold out 

EInk Corporation sold themselves to PVI for $215 million in June.

1. This was right around the time eReaders were taking off and EInk’s technology was proving itself to be the frontrunner for all of ePaper.
2. EInk’s sales in the first quarter of 2009 were $18 million.
3. The companies using eInk at the time (courtesy ChannelWeb) -
   

   PVI, Epson, LG Display, PolymerVision, Hewlett-Packard and Plastic Logic.

   Also Amazon (the Kindle) and Sony (Sony Reader).

4. It started out as a cheaper deal and was increased after shareholder/investor protests.
5. IEEE Spectrum had ranked eInk’s patent portfolio 3rd richest in the world for computer peripherals and storage.

EInk were set to be a multi-billion dollar company and right in the middle of an explosion in growth they sold out for $215 million. How does that make sense?

The Alliance is great for eReaders, despite the strengthening of PVI/LG Display’s hold on ePaper

While we now have one alliance in a ridiculously powerful position in the world of ePaper, there are lots of benefits -

1. Revenue from almost every eReader goes into the PVI/LG Display alliance. More money for research and development.  
2. Economies of scale so the Alliance can really cut prices. Which actually makes it even tougher for rivals to compete.
3. Insights and feedback from every eReader go to the alliance.
4. The Alliance will probably take much bigger risks and focus on much bigger advances than what smaller, fractionated companies would.
5. It greatly improves the odds of eInk surviving and reaching the point of mass adoption.

Every eReader manufacturer now has a big dependable source for eInk displays and one they know will be working hard and fast to improve eInk technology.

Filed under: eBook Reader Devices Tagged: | epaper, future of epaper, pvi