Technological innovation is happening faster than people imagine. Kindle, Amazon.com’s electronic reader, serves as a clear example, as the book-size device has overturned the conventional concept of book reading.
The device was a hit among tech-savvy shoppers in the US unfazed by the severest economic recession since World War II.
Taiwanese manufacturers played a major role in Kindle’s success.
Spearheading the expansion into the fledging e-paper display and e-reader business, Taiwanese manufacturers seem well-positioned to take the lead in the market, analysts say.
“Taiwanese manufacturers are shifting away from the long-term role of earning slim profits by making electronics for other companies. They now own core component technologies that distance them from the competition abroad,” said David Chen (陳賜賢), a senior analyst at the Taipei-based Market Intelligence & Consulting Institute (MIC, 產業情報研究所).
Local panel maker Prime View Technology International Co (PVI, 元太科技), which commands a 90 percent market share, is a pioneer in the field. The company began supplying e-paper modules to e-reader vendors including Amazon.com and Sony Corp two years ago.
To cement its lead, PVI signed an agreement with e-paper display company E Ink Corp in June for a cash-and-share buyout deal worth about US$220 million.
Sipix Imaging Inc, a US-turned-Taiwanese company, is shipping e-paper display this fall, making the company the world’s second e-paper displays supplier. It also broke PVI’s dominance in the e-paper display market.
AU Optronics Corp (AUO, 友達光電), the nation’s top liquid-crystal-display (LCD) panel maker, acquired a 32 percent stake in the company for US$30 million seven months ago. AUO executives have now taken the helm at management.
E-paper displays are the main component in e-readers and account for the biggest portion — more than 30 percent — of the total manufacturing cost, Taipei-based research house Topology Research Institute (拓墣產業研究所) said.
Controlling the e-paper display manufacturing sector would help local companies gain a stronger foothold in the e-reader market, Topology analyst Harrison Po (柏德葳) said.
PVI and AUO could be two of the biggest beneficiaries from the fast-growing e-reader market, as E-Ink and Sipix outpaced rivals in commercially launching e-paper displays two years ago and this year respectively, Chen said.
While potential rivals such as Japan’s Bridgestone Corp and Fujitsu have showcased prototypes of e-paper displays, it might be at least a year before they catch up with E Ink and Sipix, as they have yet to overcome technological problems such as poor resolution and slow refresh time, Chen said.
Last year, Taiwanese electronic power supply maker Delta Electronics Inc (台達電) exhibited the first-generation of e-paper displays using Bridgestone technology during the IFA consumer trade show in Berlin, but no commercial product has been seen yet.
As early players, local firms are pinning hopes on emerging e-reader business to breathe new life into their operations.
AUO said it aimed to enhance profitability and create a buffer against the volatile LCD industry by diversifying into new green businesses — including e-readers and solar cell industries — to compete with bigger South Korean rivals LG Display Ltd Co and Samsung Electronics Co, whose strong brand businesses have helped them handle industrial troughs more effectively than panel makers.
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