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In early August E Ink Holdings — the company that makes the vast majority of black-and-white ePaper displays that appear in eReaders, such as those made my Amazon and Barnes & Noble — announced it had signed a definitive agreement to buy 82.7% of the shares of SiPix Technology and its wholly owned subsidiary SiPix Imaging, the Number 2 player.  E Ink went on to say it wishes to buy up to 100%.  The purchase is valued at about NT $1.5B (US $50.1M).  The final closing is likely to be during Q4’12, pending the customary regulatory approvials.

E Ink ePaper display in Nook Reader with Glowlight.  (Photo:  Ken Werner)

The purchase will not change the eReader landscape very much since E Ink already makes more than 90% of the ePaper displays for that market, with customers that include Amazon, Barnes & Noble, Bookeen, Ectaco, Hanvon, iRiver, Kobo, Sony, and Wexler.

SiPix, which was established in 1999 and was subsequently bought by Taiwanese panel-maker AUO, has major facilities in California and Taiwan.  The company has had its major successes in signage and shelf labels, which are well suited to its micro-cup electrophoretic display technology.  Because this technology uses just one color of charged particle and is relatively straightforward, it should offer cost advantages for such applications,  But, for eReader displays, it has not been able to match the contrast ratio and quality of E Ink’s microcapsule approach that uses two kinds of charged particles, each with a different charge and a different color.  Industry sources say that quality issues have more than eaten up an initial 30% price advantage SiPix has in eReader displays.  As a result, customers for SiPix eReader displays have been limited to SiPix-related companies such as BenQ and ASUS, and perhaps half a dozen Chinese companies that account for a relatively small percentage of the market.

The combined company intends to offer a large portfolio of ePaper products that will allow it to diversify into new applications. “E Ink is committed to growing the ePaper market and the purchase of SiPix shares is part of our long term growth strategy,” said E Ink Chairmant Scott Liu.

“In the recent past, we enabled an entire eReader market with our electronic paper,” said Felix Ho, the company’s Vice Chairman.  “Today, E Ink’s products are finding homes in a number of new applications which can be better served with the inclusion of SiPix’s products, technologies and intellectual property.”  Ho also noted that the purchase will provide E Ink with larger global network of offices to support customers in different geographical markets, and will also give the company a stronger patent portfolio.

There have been several ePaper technologies whose owners have tried hard to find commercial niches for them.  But Qualcomm recently announced it would retreat from manufacturing mirasol displays and move to a licensing model.  Earlier, Bridgestone abandoned its “dry” electrophoretic technology, and there are now persistent rumors that Samsung is trying to divest itself of its Liquavista electro-wetting technology.  There are a couple of other players, but they are not significant factors.

That leaves E Ink as the only remaining ePaper tiger, roaring in triumph at the top of its Taiwanese hill.

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, display manufacturing, and display technology.  You can reach him at kwerner@nutmegconsultants.com.

Posted by Pete Putman, August 16, 2012 12:53 PM

About Pete Putman

Peter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.

Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.