Small display makers face cash crisis
"...Publicly held companies have been forced to spin off unprofitable business-es to improve their standing among stockholders. For instance, Three-Five Systems Inc., Tempe, Ariz., decided last week to spin off its money-losing microdisplay business into a separate, publicly traded company called Three-Five Microdisplay Inc.
"The market has so far not given us value for our vision in microdisplays," said Jack Saltich, president and chief executive, who expects the spinoff to make Three-Five Systems, which will focus on value-added LCDs and services, profitable immediately after the separation is completed in July.
Three-Five Systems is investing $20 million to $25 million in Three-Five Microdisplay to help get it off the ground, but some analysts say that may not be enough.
"It seems like a tough way to go for a small company," said Chris Chinnock, an analyst at Insight Media, Norwalk, Conn. "Three-Five Microdisplays has got to bring in design wins as soon as possible."
iSuppli's Semenza added, "The issue is how these players tap into the global production network."
Both analysts expect more suppliers to consolidate while others team to leverage core competencies and share development costs...."
ebnonline.com |
