Small Business Short--Three-Five Gets Brighter:
By Claudia DeMairo
At the center of the electronic-gadget boom is the liquid crystal display. From mobile phones to PalmPilots to household and medical devices, the information age is coming soon to an LCD near you.
One company seeking to cash in on the surge in demand for LCD modules is Three-Five Systems (NYSE: TFS - news). With mobile phone shipments expected to reach half a billion within a few years, and personal digital assistant sales set to double by the end of this year, Three-Five's future certainly seems bright.
This week Three-Five opened a design and engineering center in Beijing, which will expand its presence in China. They have already secured design wins with five Chinese device manufacturers.
Moreover, its biggest customer, Motorola (NYSE: MOT - news), has substantial manufacturing capability there. China accounts for 10% of Motorola's revenue, business that is likely to flow to Three-Five. Motorola is the second-largest maker of mobile phones, behind Finland's Nokia (NYSE: NOK - news).
Three-Five is also involved in the development of a new technology called organic light-emitting diode (OLED). Set to debut in devices by 2002, it is an exceptionally bright display that will improve the color and resolution of very small screens. OLEDs emit their own light, and so require very little power, which makes them especially attractive to the huge portable market. Display market research firm Stanford Resources expects the OLED market to reach a value of $714 million and 100 million units by 2005.
Another revolutionary technology that Three-Five is developing is the liquid crystal on silicon (LCoS) micro-display. No bigger than one inch diagonally, these display modules are being designed for portable Internet access and TV, computer monitor and LCD projectors.
Financially, Three-Five's picture is coming in clearly. Profits and revenue for the first nine months have tripled over the previous year. The stock is currently trading in the middle of its 52-week range. |
