Mark, In your opinion, does the following TheStreet.com article represent a possible boom or bust or (not relevant)for AFCO or PHTN?
Stock Strategies: Visualize This: Display-Screen Technology Poised for
Takeoff
By John Rubino
Special to TheStreet.com
11/26/99 10:47 AM ET
You've all probably heard the "ubiquitous computing" rap by now, about
how tiny, cheap microprocessors will soon imbue with intelligence
everything from toasters to wristwatches to window blinds.
But you may not have heard the story's visual corollary: Thanks to a
new technology called Organic Light Emitting Device, or OLED, by the
end of the coming decade, display screens will be ubiquitous, too.
Office windows will become videoconference monitors. Car windshields
will be interactive maps. Wallpaper and T-shirts will change design on
command. The list goes on, but you get the idea. The business model
will be low price/high volume, and whoever owns the key technologies
will put up serious numbers.
"This is the hottest thing I've seen in my 20 years in the field," says
David E. Mentley, senior vice president for display-industry research
at Stanford Resources, a San Jose, Calif., research firm. "There are
between 50 and 100 companies around the world that are playing with
OLEDs right now, and several dozen that are serious about getting
products into the market."
Over the next five years, Mentley sees OLED sales rising from the
current couple of million to $700 million. And then, as production runs
lengthen, costs fall and people get creative with this stuff, the real
fun will begin.
Unfortunately, so many promising ways of commercializing the different
versions of OLED are being tried and so few have come to market, that
it's a little early to be picking winners.
Electronics giants like Sony (SNE:NYSE ADR), Philips (PHG:NYSE ADR) and
Hitachi (HIT:NYSE ADR) are players, of course. But since they make most
of today's displays, they lose as well as gain when new technologies
replace old. In any event, they're so big that OLED sales won't be a
make-or-break issue for investors.
IBM (IBM:NYSE) recently unveiled a spray-on transistor that, according
to a press release, "could one day be used to make, for instance, a
computer screen that could be rolled up." But here again, will this add
appreciably to a multibillion-dollar bottom line? Nah.
Eastman Kodak (EK:NYSE) is a possibility, though. The film giant poured
a lot of its early cash flow into digital imaging research and
generated some basic OLED patents. Then it sat on them for years,
apparently unwilling to do anything that would threaten its chemical
photographic film business. But the dithering is over, and now Kodak's
licensing its patents to all comers.
In October, Kodak and Sanyo (SANYY:Nasdaq ADR) unveiled what they claim
is the world's first commercially viable full-color, active matrix OLED
display. The 2.5-inch screen is as thin as a dime, weighs less than its
LCD (i.e., liquid crystal display, the standard notebook monitor)
counterpart and uses less power. It's thus a good candidate for the
screens on digital video cameras and personal digital assistants, or
PDAs. Scaled up, it's a notebook monitor candidate.
At the other end of the size spectrum is Universal Display
(PANL:Nasdaq), which is commercializing a string of OLED patents
generated by researchers at Princeton and the University of Southern
California.
Universal Display's variations on the OLED theme include one that's
transparent when not energized, making it a possibility for
incorporating a data display into windshields, helmets and eyeglasses.
Another can be built on flexible plastic and unbreakable and/or curved
surfaces, while a third involves stacking red, green and blue pixels on
top of one another for high-resolution displays.
According to Janice Mahon, Universal Display's vice president of
technology commercialization, "2000 is our commercial prototype year,
and in 2001 we'll partner with someone to introduce our first
products." I'm long this lottery ticket.
And at least two private companies look like near-term IPO candidates.
Cambridge Display Technology is developing some of Cambridge
University's groundbreaking OLED patents. Unlike Kodak and Universal
Display, which are focusing on small-molecule technologies, Cambridge
is working with large-molecule polymers. Without getting any more
technical (as if I could), it's possible that polymers have important
cost advantages over small-molecule OLEDs. Big-name licensees include
Philips, Seiko Epson and Hoechst (HOE:NYSE ADR).
UNIAX, a private firm based in Santa Barbara, Calif., meanwhile, has
licensed Cambridge's technology for commercialization and has racked up
more than 50 commercial and government R&D contracts so far, which in
turn have enabled it to generate lots of patents of its own. To sum up,
there isn't a proven pure play in OLEDs just yet. But there might be,
if any of the last three companies generate commercial-quality results
next year. So read this column as a heads-up, not as a recommendation. |
