Prime View International Co Ltd (元太科技), the world’s biggest e-paper display module maker, yesterday signed an agreement with LG Display Co of South Korea to jointly boost the fledgling e-paper display business and to stave off increasing competition from new players.
The tie-up between the two companies will be comprehensive, ranging from capital investments, e-paper display purchases and cross-licensing that would also involve Prime View’s flat-panel affiliate Hydis Technologies Co.
“We anticipate the collaboration will enlarge [the e-paper display module] market scope and will [help us] secure our leading position,” Prime View chairman Scott Liu (劉思誠) told a media briefing.
Last week, Prime View completed the acquisition of E Ink Corp. E Ink outpaces rivals such as SiPix Technology Inc (達意科技) in producing e-paper displays and supplies those used in Amazon’s electronic reader series Kindle.
LG Display has signed a separate purchase contract with E Ink to secure supply of e-paper displays, a joint statement said.
Earlier this month, LG Display invested US$10 million in Prime View’s global depositary receipts. Translating GDR into common shares, LG Display owns about a 0.5 percent stake in Prime View.
The partnership would help the company seize a 20 percent share of the e-paper display module market next year, compared with the 15 percent it controls this year, LG Display chief executive Young Soo-kwon said in Taipei.
The companies would also pool production capacity on certain e-paper and high-end display panels to cope with growing market demand and to achieve higher cost efficiency, the statement said.
Market researcher DisplaySearch forecast that the e-paper display market would grow at a 64 percent compound annual growth rate to 1.8 billion units in 2018, from 22 million units this year.
“The cooperation with LG Display may help Prime View solve insufficient [glass] capacity [problems] and probably help it overcome e-paper technological bottlenecks, such as making colored or flexible displays,” Yuanta Securities Co (元大證券) flat-panel analyst Dale Gai (蓋欣山) said.
With growing contribution from the high-margin e-paper display business, Prime View is expected to earn NT$3.33 billion (US$103 million), or NT$4 per share, next year, compared with losses of NT$833 million this year, Gai said.
E-paper display may make up a bulky 70 percent of Prime View’s revenues next year, Gai said. Currently, the share is about 60 percent, the company said.
Based on the agreement signed yesterday, LG Display will also subscribe for US$30.5 million in convertible bonds issued by Hydis Technologies.
Commenting on the display panel industry, Kwon said TV demand was better than expected and notebook computer demand from corporations was also on the rise, given that the global economy is picking up. That will make next year a better period for the industry, Kwon said.
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