Sanyo, Kodak Launch Display Venture
Tuesday December 4 6:39 AM ET
Sanyo, Kodak Launch Display Venture
By Edmund Klamann
TOKYO (Reuters) - Sanyo Electric Co Ltd, Japan's third-largest consumer electronics maker, and photo film giant Eastman Kodak Co on Tuesday unveiled plans for the world's first mass production of ultra-thin next-generation displays.
A joint venture, targeted for total investment of 50 billion yen ($400 million), would expand cooperation between the two in organic electroluminescent (OEL) displays and aims to get a head-start on a slew of rivals in the hot new technology.
Japanese electronics makers hope to use the power-efficient next-generation screens in cell phones, digital cameras and other hand-held gadgets with size and battery-power constraints, and as the technology improves, in TVs and home electronics as well.
The Sanyo and Kodak venture will launch volume output in February 2002, aiming to boost sales to 70 billion yen in 2005 from just a few billion in the first year. They also hope to capture a hefty 30 percent share of the global market.
``The technology has advanced enough to start operations, but to expand the market further we need new breakthroughs, so we will join hands even more broadly to strengthen our research and development,'' Sanyo chairman Sadao Kondo told a news conference.
Sanyo will take a 66 percent stake in the venture while Kodak would hold the rest. They aim for the operation to be generating a profit by the third year of operation.
BATTLING FOR MARKET SHARE
Several other Japanese manufacturers also plan to pile into the market over the next year, including Toshiba Corp, a joint effort between NEC Corp and Samsung SDI Co, and a venture among Tohoku Pioneer Corp, a TDK Corp affiliate and Sharp Corp, Japan's largest maker of conventional liquid crystal displays (LCDs).
Most of those will use technology patented by Kodak, but the U.S. company vowed to pursue a ``statesman-like'' policy on licensing other manufacturers even though it will soon start making screens itself via the venture.
``Somewhere between a monopolistic extreme that is either stupid or illegal, which we won't do, and the other extreme of licensing every Tom, Dick and Harry, there has to be a middle ground,'' said Leslie Polgar, president of Kodak Display Products. He blamed overly lax licensing by LCD patent holders for commoditization of products such as notebook PC screens, which triggered fierce price competition and pushed many Japanese companies' display operations into the red this year.
The Tokyo stock market showed only a brief reaction to the news, with Sanyo already having indicated it would start OEL screen production next spring.
Sanyo's shares briefly jumped 4.4 percent to 641 yen after the opening but later dipped into negative territory before ending at 615 yen, up a marginal 0.16 percent and underperforming the benchmark Nikkei average's 0.79 percent rise.
NOT READY FOR PRIME TIME
The compounds used in OEL screens, also known as organic light-emitting diode (OLED) displays, emit light when a current is passed through them, allowing thinner construction and using less power than LCDs, which require back-lighting.
OEL technology -- particularly the more complex active-matrix variety -- also promises brighter contrasts and faster response times for moving pictures, so that images don't linger on the screen after the action has moved on.
With the technology still in its early stages, forecasts for market size vary widely. Market researcher Stanford Resources estimated the OEL display market would be worth $1.6 billion in 2007, although another firm, DisplaySearch, has forecast $3.1 billion in 2005.
Although most manufacturers are now eying the technology for hand-held devices, Sony Corp (news - web sites), the world's largest maker of audio-visual electronics, in February unveiled a larger, 13-inch screen it aims to mass produce by 2003 for flat TVs.
Samsung SDI, South Korea (news - web sites)'s largest display maker, said in October it had developed a 15-inch OEL screen.
``The basic issue is how to make large screens,'' Sanyo's Kondo said. Longer-lasting materials and greater brightness would be needed before OEL is ready for prime time in consumers' living rooms, he added. |
