Foxconn Technology Group (富士康科技集團) plans to acquire display start-up eLux Inc for about US$27.03 million in cash via four subsidiaries, including Sharp Corp, in an effort to accelerate its development of next-generation micro-LED display technology, company statements said on Monday.
The acquisition could provide a fast track for Foxconn — known as Hon Hai Precision Industry Co (鴻海精密) in Taiwan — to commercialize micro-LED technology, which industry experts say could exceed organic LED (OLED) technology.
Micro-LED shares traits with OLED, but costs less.
Foxconn’s latest move came as its top clients, Apple Inc and Sony Corp, have been investing in micro-LED in pursuit of an alternative to OLED technology, seeking similar energy efficiency and ultra-high-definition display advantages at cheaper costs.
Apple is expected to crank out a small volume of next-generation micro-LED displays for wearable devices from a plant in Taoyuan’s Longtan District (龍潭) by the end of this year, IDC analyst Annabelle Hsu (徐美雯) said in March.
Apple has placed more focus on micro-LED after acquiring LuxVue Technology Corp in 2014.
Foxconn’s Cyber Venture Capital Corp, Sharp, Innolux Corp (群創) and Advanced Optoelectronic Technology Inc (AOT, 榮創) have inked agreements to invest in eLux, Sharp and Innolux said in separate statements.
Following the investments, Cyber Venture will hold the biggest stake of 45.45 percent in eLux, while Sharp and Innolux will own 31.82 percent and 13.64 percent respectively, the statements said. AOT will hold 9.09 percent.
Sharp will acquire the rights to 21 patents developed by eLux, Sharp’s statement said.
“Cooperation between Innolux’s research and development team in Taiwan and eLux’s team in the US will help accelerate the development of next-generation display technology,” Innolux said in its statement.
The deal is expected to be completed in October, Sharp said.
ELux was established in October last year in Delaware, according to information provided by Sharp.
Taipei-based TrendForce Corp (集邦科技) said that micro-LED technology is to have a market value of between US$30 billion and US$40 billion per year once it fully replaces mainstay LCD technology.
The new technology is expected to become mainstream in three to five years, TrendForce said.
The manufacturing costs of micro-LED panels are still high, about three to four times their LCD equivalents, it said.
IDC said it expects micro-LED to become commercially available in 2020.
Micro-LED panels are suitable for smartphones and virtual-reality or augmented-reality devices due to the high demand for picture quality demanded by those products, TrendForce said.
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