Yesterday, Canon’s board of directors passed a resolution to dissolve and liquidate SED Inc., a wholly owned subsidiary established to develop and commercialize flat-panel displays based on surface-conduction electron-emitter display (SED) display technology. According to the tentative dissolution schedule announce by the BoD, the company will be dissolved on September 30th of this year, and liquidation will be completed by late December.

Ken Werner
Senior Analyst and Editor

What’s the official reason for the liquidation? After praising the brightness, color, and quality of the prototype panels Canon had made, the BoD said, "In recent years, however, faced with flat-panel television price declines that have been larger and more rapid than expected, Canon Inc. determined that securing appropriate profitability would prove difficult."

All of this was evident in February 2007, when Toshiba sold its share in SED Inc. back to Canon, thus depriving the venture of "Toshiba’s consumer electronics experience and commercial common sense." (I’m quoting my own Display Daily of March 1, 2007.) Toshiba had been more than a little frustrated with Canon’s lack of pragmatism regarding the development of SED-TV, and I suspect Toshiba was relieved when a district judge in Texas ruled that Canon had violated its licensing agreement with Nano-Proprietary Inc., thus giving Toshiba an excuse to bow out.

As we said at the time, "Canon seems to be pursuing a faith-based business plan in which broadcast monitors supply an early market and - against all evidence - production cost then declines far more rapidly than does the production cost of LCDs and plasma panels, allowing SED-TV to compete in the CE market."

One problem was that SED was a pet project of Canon Chairman and CEO Fujio Mitarai, who also deeply desired to see the Canon logo on a commercial SED-TV set (which was one of the things that had made Toshiba unhappy).

So, officially, Canon continued its support of SED Inc., but mention of the subsidiary and SED technology quickly faded from Canon press releases. Now, Canon is finally delivering the coup de grâce to SED Inc.

Does that mean that Canon is acknowledging that SED technology has had its day? Not at all. Says Canon: "With regard to SED technology, Canon Inc. plans to continue its SED panel-related research and development activities."

Well, Canon can afford to indulge Mitarai-san’s whims, and it will give some R&D engineers an interesting project to work on, even if the technology is unlikely to appear in a commercial product. This kind of stimulus program for technology workers is nothing to be sneezed at in these difficult economic times.