>Does anyone know anything about Genesis Microchip (GNSS), the Canadian company that designs and markets the specialty chips that make flat-panel displays run?<
Mike, I have been watching the stock price of GNSS for a while and a few months ago I gathered some notes on the flat panel display market. I had intended to update the information, but I have not. Nevertheless, I think it may provide some good background and it also provides some web sites that might be helpful to anyone wanting to learn about this area. Therefore I am posting my notes here for anyone who might be interested. Please keep in mind that the information is several months old and I put it together before becoming a G&K convert (thus all the shiny pebbles)
Flat Panel Displays -
Flat panel displays are the future. Their high quality fuels demand, but their high price is an obstacle. That obstacle will diminish over the next few years and the result will be much greater sales.
There are many players in this market. Some are major companies with many product lines such as NEC, Fujitsu, Mitsubishi, Samsung, Compaq, Philips and IBM. Others are private. Some are rather small.
Some background. (note: Flat Panel Displays have had great market acceptance in Japan than in the US so far.)
DisplaySearch is a market research firm that focuses on the flat panel display (FPD) market .
They produce a series of reports (quite expensive) and sometimes issue press releases that encapsulate some of their findings. Their press release from 5/28/99 stated the following: (note: these are excerpts from the press release, the full release may be read at displaysearch.com
AUSTIN, TEXAS (May 28) BUSINESS WIRE -May 28, 1999--DisplaySearch, a leading flat panel display (FPD) market research firm and the industry's only source of quarterly worldwide LCD monitor shipment data, revealed in its latest report entitled Quarterly Supply Vs. Demand Study: Desktop Monitors that the Q1'99 LCD monitor shipments jumped 806% year- over-year and 86% vs Q4'98 to reach over 850,000 units. LCD monitor revenues jumped 68.2% vs Q4'98 to reach $901 million. LCD monitor penetration as a percentage of the global desktop monitor market climbed to 4.2% and 11.4% in units and revenues respectively, up significantly from 2.0% and 7.1% respectively in Q4'98. Driving the rapid growth is dramatic increases in sales of LCD monitors bundled with desktop PCs in Japan which jumped from 15% of the worldwide LCD monitor market in Q4'98 to 39% in Q1'99.
DisplaySearch has increased its worldwide LCD monitor shipment forecast to 3.89 million units and $4.3 billion in revenues in 1999 and 5.25 million units and $5.3 billion in revenues in 2000. Companies likely to benefit include LCD monitor suppliers, LCD manufacturers and LCD monitor controller suppliers such as Genesis Microchip, Silicon Image and others.
(note: Silicon Image is a private company. Their web site contains some interesting documentation (look under Publications) and includes thoughts on flat panel growth, like this:
"Since its invention over 101 years ago, the familiar cathode ray tube (CRT) has been the principal way all of us have received electronic images on our televisions and computer monitors. Literally billions of these indispensable, bulky glass bottles have been made and sold in recent decades. But for the next century, large, thin, brilliant digital flat-panel monitors will predominate. Many children being born today will never know the CRT...")
209.19.91.91
Getting back to the DisplaySearch press release, we can see their analysis of the market leaders worldwide and in the US:
Table 1: Q1'99 WW Branded LCD Monitor Market Share
Q1'99 Unit Q1'99 Revenue
Rank Supplier Market Share Market Share
1 NEC 25.1% 26.3%
2 Fujitsu 15.5% 14.8%
3 Mitsubishi 7.4% 6.9%
4 Samsung 4.5% 4.3%
5 Compaq 4.4% 4.7%
Table 2: Q1'99 North America Branded LCD Monitor Market Share
Q1'99 Unit Q1'99 Revenue
Rank Supplier Market Share Market Share
1 Viewsonic (private co) 17.1% 16.0%
2 NEC 13.5% 21.3%
3 Compaq 11.5% 11.0%
4 Philips 7.4% 6.1%
5 IBM 7.0% 6.6%
A previous Display Search press release, from 4/7/99 included these comments:
DisplaySearch...expects Q1'99 North American LCD monitor shipments to jump 620% year-over-year to 102,000 units. In addition, DisplaySearch expects North American LCD monitor revenues to jump 286% to $117 million. Worldwide, DisplaySearch expects Q1'99 stand-alone and bundled LCD monitor shipments to jump 623% to 683,000 units and 340% in revenues to $746 million. Supporting the dramatic year over year growth are up to 48% price reductions at certain display sizes, increased performance and increased availability.
By application, the Q4'98 North American LCD monitor market was led by the financial market which held a 38% share, followed by the corporate market at 27%, medical at 10%, home office at 8%, small business at 7% and factory automation and industrial at 5%.
the full press release is at
displaysearch.com
Intel recently gave a push to the FPD market when, on 5/14/99 they announced that they had "joined the U.S. Display Consortium, an industry group fostering flat-panel production in the United States." see the press release at
204.247.196.14
U.S. Display Consortium, which is mentioned above, has a web site at
usdc.org
and this mission statement:
"United States Display Consortium (USDC) is an industry-led, public/private partnership providing a forum for flat panel manufacturers, developers, users and equipment and materials suppliers. Our mission is to expand the infrastructure required to support a world-class, competitive U.S.-based display industry."
Joining the U.S. Display Consortium was not the first push Intel had given to the FPD market. On 9/17/98 they issued this:
Intel, Compaq, Dell, Fujitsu, Hewlett Packard,
IBM, Microsoft, NEC, Silicon Image Form Digital
Display Working Group To Define Digital
Connectivity Specification
INTEL DEVELOPER FORUM, PALM SPRINGS, Calif., Sept. 17, 1998 -
Intel Corporation announced today at the Intel Developer Forum (IDF) the
formation of a Digital Display Working Group which will address the
industry's requirements for a digital connectivity specification for digital
displays and high-performance PCs. The working group, a cooperative
effort by Intel, Compaq, Dell, Fujitsu, Hewlett Packard, IBM, Microsoft,
NEC and Silicon Image will define a robust, comprehensive and extensible
interface specification addressing protocol, electrical, and mechanical
definitions.
"Digital displays will free the industry to deliver lower cost, higher quality
innovative form-factor solutions to enhance the visual computing
experience on Intel© Architecture-based PC platforms," said Pat
Gelsinger, vice president of Intel's Desktop Products Group. "By delivering
a robust, comprehensive and extensible interface specification, the Digital
Display Working Group will help clear the path for product integration and
legacy removal within the platform, thereby reducing cost and increasing
performance."
To date, several specifications and consortiums exist for digital displays,
causing a confusing environment for system manufacturers and end users.
The objective of the Digital Display Working Group is to deliver a single
industry specification that defines the interface between digital displays
and high-performance PCs in order to eliminate the confusion.
By working together on establishing an industry connectivity specification,
members of the Digital Display Working Group hope to deliver a complete,
open specification that will accelerate the adoption and implementation of
high-quality digital displays on the PC platform, allowing for a better visual
experience. The working group expects to complete the specification by
the first quarter of 1999.
The press release also includes short statements by each of the companies involved touting their commitment to the project, etc. Those comments are not included here but may be read in the full press release at
intel.com
The Digital Display Working Group has its own web site at
ddwg.org
Also involved in flat panel standards is VESA (The Video Electronics Standards Association). Their 3/29/99 press release begins:
VESA ADOPTS DIGITAL FLAT PANEL (DFP) STANDARD
High Performance Video Interface Standard Ratified and Available Now
San Jose, Calif.--(BUSINESSWIRE)--March 29, 1999 - The Video Electronics Standards Association (VESA), today announced ratification and availability of the Digital Flat Panel (DFP) Standard providing a single video connector for digital LCD monitors and projectors.
In a demonstration of broad-based industry support, VESA announced that the following companies are publicly endorsing the VESA DFP standard: 3dfx Interactive Inc., 3Dlabs, 3M, AMP, ATI, Compaq, Creative Labs, Matrox Graphics, Molex, Pixelworks, Princeton, S3, Taiko Denki Co., Ltd., VideoLogic and ViewSonic.
see the full release at vesa.org
and their web site at vesa.org
That's enough background, lets look at some companies:
Photon Dynamics, Inc. PHTN
Photon Dynamics makes test, inspection, and repair equipment for flat-panel display manufacturers. LG Electronics accounts for 27% of sales. Mkt. Cap. $70 mil, Float 5 mil
LG Electronics (Korea)
Formerly known as Goldstar, the company is a member of South Korea's LG Group and owns 55% of Zenith Electronics.
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Genesis Microchip Inc. GNSS
Genesis Microchip designs integrated circuits for processing digital images. Customers like Apple, Hitachi, Samsung, and Sharp build the circuits into their computer monitors, home theater equipment, medical imaging devices, DVD equipment, and other display systems. In addition, Genesis holds equity in Shamrock Semiconductor, which offers chip design consulting services. For the nine months ended 2/28/99, revenues totaled $26.4M, up from $10.2M. Net income totaled $7M, up from $1.5M. Mkt. Cap. is 260 mil, Float 10 mil.
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Applied Films Corporation AFCO
Applied Films provides thin-film coated glass for the flat-panel display industry, which includes liquid crystal displays used in laptop computers, cellular phones, calculators, and other electronic devices. Applied Films markets its products in the US, China, Japan, South Korea, and Taiwan Co-founders own 34% of the stock. This thinly traded stock was recently at $3, while sales and profits have been declining. Mkt. Cap. is 12 mil, Float 2 mil.
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ATI Technologies ATYT
A Canadian company, ATI is a maker of graphics accelerator chips, with products for PC and Macintosh. The ImpacTV2 chip allows users to connect a PC to a TV for games or presentations. Users can also view TV signals through a PC, and vice-versa, with the All-in-Wonder accelerator board. Customers include Apple, Dell, Gateway, and Sun Microsystems. The company calls itself " the world's largest supplier of 3D graphics and multimedia technology". For the 6 months ended 2/28/99, sales rose 79% to $624 Mil. Mkt. Cap. $2.8 Bil, Float 165 Mil. Stock has largely traded between $14 and $15 this year.
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CFM Technologies, Inc. CFMT
The company's proprietary wet processing keeps wafers and flat-panel displays safe from contamination and watermarks. Anam Semiconductor, IBM, National Semiconductor, Hewlett-Packard, and Siemens account for almost 70% of the company's sales. CFM was hit pretty hard with the "Asian crisis" , they endured layoffs and losses and the stock fell from $40 in late 1997 to the single digits. It may be comming off its lows now. Mkt. Cap. 70 mil, Float 6 mil.
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Number Nine Visual Technology Corporation NINE
Number Nine makes video and graphics accelerators that enable desktop PCs to display images with greater speed, better color, and higher resolution. In addition, the company sells graphics chips, display control software, and software drivers. Among its Fab Four tribute-paying products are Revolution graphics controller cards and Ticket to Ride, a video accelerator. Number Nine's customers include OEMs (44% of sales) such as Dell Computer, IBM, and Micron Electronics, as well as retailers (56%) like Fry's Electronics, distributors, and mail-order companies. This was a $25 stock 6/95 but has fallen and struggled to stay above $2 for the past two years. (Annual sales have declined from $119M to $46M to $17M.) Mkt. Cap. 25 mil, Float 6 mil.
From a NINE press release:
nine.com
Number Nine Demonstrates Industry's First DigitalVideo Interface (DVI) Graphics Accelerator Card
LEXINGTON, Mass., May 19 /PRNewswire/ -- Number Nine Visual Technology Corp. (Nasdaq: NINE), a leader in high-performance PC graphics and visual technology, demonstrated at the Society of Information Displays Conference in San Jose, California, the computer industry's first DVI (Digital Visual Interface) graphics accelerator card, the Number Nine SR9.
The SR9 graphics accelerator produces the digitally perfect video signal required by the new generation of digital LCD flat screen monitors. Delivering a digitally pure video signal to the LCD displays eliminates the need to convert graphical data from digital to analog within the card and then back to digital within the LCD display. Doing away with the multiple conversion processes preserves the integrity of the video signal while reducing the cost of the overall display solution. Text is laser sharp and the graphics are picture perfect.
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Jaco Electronics, Inc. JACO
Jaco Electronics distributes more than 60,000 electronic components throughout the US and Canada and is making a big push into flat-panel displays. This stock has been in a steady downtrend since the end of 1995, falling from the high teens to the $3 range. The falling stock price has coincided with flat to falling sales. Mkt. Cap. 14 mil, Float 1 mil.
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Silicon Graphics, Inc. ( name changed to SGI) SGI
SGI produces workstations and graphics servers that deliver advanced 3D graphics and computing capabilities for engineering and creative professionals. The company manufactures graphics computers used for motion pictures special effects and makes modeling and animation software; 84%-owned MIPS Technologies builds microprocessors. Struggling in a high-end computer market (workstations) that is being encroached upon by increased power in the low end (PCs), SGI is embracing PC technologies and moving from a Hollywood focus to the corporate realm. For the 9 mos. ended 3/99, total revenues decreased 17% to $1.92B. Net loss fell 57% to $104.4M. Lower loss reflects a $54M gain on sale of a portion of SGI interest in MIPS & restructuring adjustment. This was a $40 stock in 1995, it dropped into the singe digits late last year than ran to $20 around 2/1/99. Now at $13. Mkt. Cap. 2.4 Bil, Float 132 mil.
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Brooks Automation, Inc. BRKS
Brooks makes "factory automation solutions" for the global semiconductor, data storage, and flat panel display industries, producing about 90% of the vacuum robots and cluster assemblies bought by semiconductor manufacturers. This includes factory automation software (25% of sales). Sales are divided among North America (about 60%), Asia (30%), and Europe (10%). For the 6 months ended 3/31/99, revenues fell 20% to $43M. Mkt. Cap. 210 mil, Float 10 mil.
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So which are the best prospects here? For good market positions I like GNSS. CFMT, NINE or SGI might be good for a bottom fishing turn-around play. Other interesting prospects to keep an eye on PHTN, ATYT and BRKS
For more information on flat panel displays including articles and recent news see this CNET site:
cnet.com panel/ |
