Forget the Barry Young, Bruce Berkoff spat over next generation TFT materials technology (LCD vs OLED), the big display news that broke yesterday wasn’t here in San Antonio at the beginning of Display Week, where the SID symposium and expo is about to begin, and display guru’s from all points are converging. Key technology and materials supplier E-ink entered into a "definitive agreement to be acquired" by Prime View International (PVI) to create "a single public company that is dedicated to electronic paper" according to E-ink co-founder and CEO Russ Wilcox. And this isn’t just marketing speak, combined, the two companies support 20 e-book makers in all regions and E Ink announced last month that over 1M displays for E-Book readers are being used today. They went on to say, "In fact almost all e-paper readers use E Ink technology."

Steve Sechrist
Senior Analyst and Editor

Over the past four years PVI has been positioning itself to dominate the e-book market with acquisitions, and technology partners, and securing a customer base of the most popular E-book product brands in the market including Sony, (SonyReader PRS series) and Amazon (Kindle 2 and DX). Here’s a brief list compiled in the official press release:

• In 2005, PVI acquired the e-paper business of Philips Electronics and partnered with E Ink
• PVI invested heavily in dedicated driver chips and touch screens for e-paper, as well as flexible displays, which will be marketed later in 2009
• In 2008, PVI bought a 74% stake of Hydis Technologies of Korea, quadrupling capacity for the transistor backplanes used in e-paper
• Today, E Ink’s Vizplex imaging film is used in handsets, signage, smartcards, memory devices, and battery indicators

There’s even a "green side" to the deal as Scott Liu, chairman and CEO of PVI pointed out, "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 point was underscored yesterday at the SID Business conference keynote by display matriarch and new technology pioneer, Mary Lou Jepson (OK, she is also CEO of Pixel Chi, and successfully brought the One Laptop Per Child vision to millions of kids world wide.) She reminded the industry, "in China and India, there simply are not enough trees in those nations to print the books needed to educate their student populations."

Financially, the deal may not be a great boon to the E-ink investors. According to E-ink-info.com, they sank $150M over the years, so the $214M deal with PVI is "probably a disappointed for investors… Not a very good return on their investment." Specific terms of the deal said PVI will finance the acquisition with an equity placement and a convertible bond offering that is expected to close in the fourth quarter of 2009. Finally, the privately held company announced that its sales were $18M in the first quarter of 2009, up 157% over the same quarter last year–impressive performance, especially during this "historic economic downturn." One colleague at the show, Ken Werner told me PVI looks at E-ink as "golden" and doesn’t want to change anything. He may be right, in the press announcement yesterday, the company said it will increase headcount in 2009 from 127 to 150 people.

So for now, the Cambridge, MA based E-ink will stay the course with no expected lay-offs or plans to move the company to the new parent’s home in Taiwan. Word on the street here at SID is that this is good for the e-book industry, with PVI offering a solid technology base for the materials company to thrive. With color and flexible technologies waiting in the wings, E-ink’s challenges have only begun. We’ll have a chance this week to benchmark the state of e-book display technology and get a glimpse of what’s on the horizon, for PVI and the rest of the display makers looking to make their mark in this space–so stay tuned.