Now Fringe Field Switching (FFS) panel technology from Hydis is accepted by two tier one manufacturers: AUO and Sharp. With that the current high-quality IPS technology is going to be superseeded with the enhancement over it, called FFS.
More about FFS is in: Amazon Tablet PC with E Ink Holdings’ Hydis FFS screen [May 3, 2011 — Sept 1, 2011]
Below you can find the whole history of Hydis, from the very recent successes down to its acquisition by E Ink Holdings announced in November 2007 (then named as Prime View International, PVI).
Updates #2: AUO signs patent cross-licensing agreements with E Ink and Hydis [DIGITIMES, Oct 12, 2012]
AU Optronics (AUO) has announced that it has signed patent cross-licensing agreements with E Ink Holdings and its subsidiary in South Korea, Hydis Technologies. The parties have agreed to cross license specified patents owned by each party.
Under the terms of the agreements, which will be effective for 10 years, the parties will be able to use the specified proprietary technologies of the other, according to AUO. The patent cross-license agreements primarily involve LCD related technologies, including the fringe field switching (FFS) technology with applications to smartphones and tablets.
Hydis’ FFS technology has wide viewing angle, power-saving, high contrast, and high resolution features. With the signing of the agreements, AUO said its strengths in wide viewing angle technology will be further enhanced.
– E Ink shifts panel orders from CPT to AUO [DIGITIMES, Sept 6, 2012]
AU Optronics (AUO) has reportedly obtained small- and medium-sized panel orders from electrophoretic display (EPD) maker E Ink due to E Ink’s dissatisfaction with tablet panels made by Chunghwa Picture Tubes (CPT), according to industry sources.
Both E Ink and AUO were not able to provide comments specifically about the orders, but E Ink did say that its biggest concern is production capacity and that it needs to meet increasing requirements from various clients. CPT said it has not lost tablet panel orders, but clients may need additional panel suppliers to meet increasing demand.
The sources pointed out that E Ink’s order shift from CPT to AUO is not a huge surprise as E Ink recently announced it was planning to buy Sipix Technology, an EPD maker and subsidiary of AUO, for roughly US$50 million. The purchase indicates that AUO and E Ink are tightening relations and AUO may continue to see increasing orders from E Ink in the future.
Meanwhile, E Ink recently signed a cross licensing agreement with Sharp to let Sharp use fringe field switching (FFS) LCD technology developed by E Ink’s South Korea- based subsidiary Hydis Technologies. This is important to Sharp because it will be able to use the technology in panels that are rumored to appear in upcoming Apple products, and which could bring in increased revenues in the second half of the year, said the sources.
– E Ink, Sharp sign patent cross-licensing deal [FocusTaiwan, July 12, 2012]
Taiwan’s E Ink Holdings Inc., the world’s largest electronics paper display supplier, signed a patent cross-licensing agreement Thursday with Japan’s Sharp Corp. to use TFT and LCD technologies.
E Ink’s South Korean unit, Hydis Technologies Co., also signed a similar agreement with Sharp, allowing both parties to use certain of each others’ patented technologies in return for licensing fees, according to a statement from E Ink.
Within the 10-year term of validity, E Ink and Sharp will maintain a “patent peace” to prevent the companies and their customers from being affected by patent issues.
This will help both companies to focus on the development of their businesses, the statement said.
E Ink has a 90 percent share of the worldwide e-paper market, and its customers include online book store operator Amazon.com Inc., electronics manufacturer Sony Corp. and Chinese e-reader maker Havon Technology Co.
Hydis makes LCD panels based on fringe field switching (FFS) technology that are used in displays for smartphones, tablets and oth
Hydis chairman notes increased demand for FFS panel [DIGITIMES, Aug 12, 2012]
Electronic paper display (EPD) E Ink subsidiary Hydis Technologies is seeing increased demand for panels using its fringe field switching (FFS) technology for use in high-end smartphones and tablet PCs, according to company chairman Johnson Lee. Lee expects related revenues to double in 2012 and increase another fold in 2013.
FFS panels are used in the Nexus 7, so the technology has gained more recognition with panel makers and consumers since the launch of Google’s tablet. Concerning other devices adopting the technology, Lee did not provide any specifics about the volume of orders or customer information, so details concerning what he meant was left for speculation.
Already there have been numerous reports that Hydis would benefit from orders for an upcoming version of the Amazon Kindle Fire. Rumored to be scheduled for release in the third quarter but dogged by reports of delays, the new Kindle Fire supposedly would make use of FFS panels to take advantage of the technology’s advanced color gamut and high luminosity, according to the ongoing speculation.
In addition, E Ink signed a patent cross-licensing agreement with Sharp to use TFT and LCD technologies and immediately speculation arose that the agreement was signed because Sharp‘s biggest customer is Apple and the company wants to utilize the patented technologies for panels used in the iPad.
According to Hydis, its AFFS (Advanced FFS) technology provides a higher contrast ratio and white levels increase clearness as well as providing a 180 degree viewing angle due to technology features such as an increased aperture ratio and transmittance through the removal of the BM (Black Matrix) and improved control over liquid crystals through the use of nanoscale electric field. Hydis claims AFFS transmittance is 40% better than that of TN TFT – which are often used in mobile applications, consuming 30% less power.
E Ink expected to ship 12 million display panels in 2H12 [DIGITIMES, June 26, 2012]
E Ink Holdings, a Taiwan-based maker of e-paper displays, is expected to ship 12 million display panels in the second half of 2012, decreasing by 14.3-20% from 2011, according to industry sources in Taiwan.
The company declined to comment on the news.
The sources indicated E Ink has obtained orders from Amazon for display panels used in 6.0 million Kindle Fire tablet PCs, with shipments to begin in the second half of 2012. In addition, E Ink has landed orders for FFS (fringe field switching) panels for use in 3.0 million Google tablet PCs expected to be unveiled at the 2012 Google I/O during June 27-29.
E Ink will also start shipments of e-paper displays for use in Amazon and Barnes & Noble e-book readers in the third quarter of 2012, the sources noted.
E Ink’s wholly owned subsidiary maker of TFT-LCD panels and e-paper modules Transcend Optronics has set up several affiliated makers in a self-use industrial park of over 50 hectares (123.6 acres) in land area located in Yangzhou, eastern China, the sources indicated.
AUO lands orders from HTC through cooperation with E Ink, says newspaper [DIGITIMES, May 20, 2011]
Taiwan-based AU Optronics (AUO), through cooperation with Taiwan-based E Ink Holdings, has obtained orders for FFS (fringe field switching) TFT-LCD panels from Taiwan-based vendor HTC, with such panels to be used in HTC’s 10.1-inch tablet PC Puccini, according to the Chinese-language newspaper Economic Daily News (EDN).
In response, however, both AUO and HTC declined to comment, EDN indicated.
AUO, CMI reportedly looking to license FFS technology from E Ink for iPad panels [June 25, 2010]
AU Optronics (AUO) and Chimei Innolux (CMI) are reportedly in talks with E Ink Holdings, previously known as Prime View International (PVI), for its FFS (fringe field switching) technology in order to attract panel orders for iPad or iPad like products, according to market sources.
AUO and CMI have declined to comment.
But some other market observers indicated that AUO is more likely to use the VA (vertical alignment) technology to produce panels for tablet PCs, while CMI is expected to obtain the FFS technology in order to enter the supply chain of iPad. CMI has obtained IPS technology from Hitachi but it is mainly for the panel maker’s medical applications, the observers said.
If CMI became an iPad panel supplier, it would help Foxconn Electronics (Hon Hai Precision Industry) reduce the production cost for the tablet device that the EMS player is making for Apple, the observers said. CMI is a member of the Foxconn Group.
LG Display shipped up to 700,000 9.7-inch panels for iPad in April-May, up from 470,000 units in March and 300,000 units in February. Samsung started shipping iPad panels in April, with shipments increasing to 100,000 units in May, the market sources said. Samsung’s iPad panel shipments are expected to reach 300,000-500,000 in July, the sources added.
Shipments of iPad in the first half of 2010 are expected to reach 3.5-3.8 million units and 8-9 million units in the second half of the year, according to Digitimes Research.
Hydis to Offer On-Cell Touch for LCD Modules [Hydis press release, July 10, 2012]
GYEONGGI-DO, South Korea, May 31, 2012 (BUSINESS WIRE) — South Korea-based TFT-LCD panel maker Hydis Technologies, a subsidiary of Taiwan-based E Ink Holdings Inc., today announced that they will add on-cell touch screen panel (TSP) technology to their LCD portfolio of offerings.
Hydis is able to offer the TSP technology with on-cell touch, which provides the customer a slim and lightweight form factor, with the added benefit of lower cost versus traditional touch technologies. The touch functionality is embedded within the display itself rather than as a separate component atop the display. This results in more precise touch with better optics due to reduction in parallax errors. In addition, LCDs with this touch technology consumes less power and can take advantage of cost reductions in manufacturing due to the reduction of a glass layer and the alleviation of the need for a separate touch panel supplier.
Hydis will begin offering the on-cell technology to the smartphone and tablet markets beginning this month. Hydis is perhaps best known as the inventors and providers of Fringe Field Switching (FFS) technology, which is featured in many smartphones and most tablets currently in the market. FFS LCD provides a wider viewing angle and color gamut, consumes less power and offers better high ambient readability than traditional LCDs. Hydis’ publicly announced customers include Dell, HP, Lenovo, Kobo & Siemens, among others.
“Hydis’ FFS technology is preferred by Tablet and Smart phone makers worldwide,” said Johnson Lee, Chairman of Hydis Technologies. “With on-cell touch, we are able to combine the best LCD in the world with a touch technology that offers better performance at lower cost.”
End od updates #2
See also:
– Amazon Tablet PC with E Ink Holdings’ Hydis FFS screen [May 3, 2011 — Sept 1, 2011] where you can find all the basic information about the significant advances over IPS (In Plane Switching) LCD panel technologies (e.g. used in iPad), called FFS (Fringe Field Switching) including their usage in niche tablet/slate products (by Motion Computing) as far back as 2008 and now coming against the seemingly allmighty iPads in the upcoming Amazon tablet PCs
– E Ink Holdings (8069.TWO) Initiate at Buy: Dual Growth Engines to Propel Earnings [comprehensive 32 pages evaluation by Citi Investment Research & Analysis, a division of Citigroup Global Markets Inc., Aug 4, 2011] HIGHLY RECOMMENDED READ and NOT ONLY FROM PURE SHARES AND FINANACIALS POINT OF VIEW
– E Ink Holdings EPD prospects are good [April 30, 2011 — Aug 17, 2011]
– Undermining E-Ink and single-purpose E-readers [Aug 23, 2010 — Jan 10, 2011]
Update #1: E Ink suspending FFS panel production cooperation agreement with LG display [Nov 25, 2011]
E Ink Holdings (EIH) will suspend a cooperation agreement it signed with LG Display for the production of FFS (fringe field switching) LCD panels and will buy back a sum of corporate bonds (CBs) issued by its Korea-based subsidiary Hydis Technologies from LG Display, according to EIH.
EIH’s production of FFS wide viewing angle panels will not be affected by the suspension of cooperation as EIH has teamed up with Taiwan-based Chunghwa Picture Tubes (CPT), utilizing the panel maker’s 6G production line to produce FFS panels, said industry sources.
Hydis will also continue to hold the patents pertaining to the production of FFS panels although it may lose some orders from clients in Korea, indicated the sources.
The book value of Hydis’ CBs held by LG Display totals KRW34.257 billion (US$30.5 million), EIH revealed. EIH’s board of directors has approved the company’s plan to invest US$30.5 million for the purchase of Hydis CBs, according to a Chinese-language Commercial Times report.
From 10 strategic levers for LCD sourcing by Hendy Consulting [May 4, 2011]
E-Ink displays are currently a high volume and growth business. PVI own capacity has never been that great (though is now being expanded) but is augmented by the coowned capacity at Hydis (that PVI shares with Varitronix and Alco Holdings) and also supply agreements for cells with CMI and CPT. Strategic challenge is that E-Ink could potentially behave as a monopolist (since sole provider of film) which may impact eReader growth
CPT develops FFS panel and aims to cooperate with E Ink [Jan 21, 2011]
Chunghwa Picture Tubes (CPT) has started development of FFS (Fringe Field Switching) panels and expects to cooperate with E Ink Holding (EIH) and support EIH’s Korea-based subsidiary Hydis’ production capacity to fulfill demand.
Although current existing panel capacity theoretically should be more than enough to fulfill the surging demand from tablet PCs with panel sizes covering 7- to 10-inch, due to the special specifications of tablet PC panels, such as high resolutions, low power consumption and wide viewing angles, actual supply is expected to fall short in 2011.
Panel makers noted that IPS and FFS panels are not easy to produce, hence CPT will not be able to start mass production immediately. Furthermore, capacity for wide viewing angle panels such as IPS is limited, and panel makers will need some learning time before going into mass production.
E Ink hits record revenues in 2010 [Jan 10, 2011]
E Ink Holdings has reported record consolidated revenues of NT$3.68 billion (US$120 million) for December, NT$9.725 billion for the fourth quarter, and NT$25.179 billion for 2010.
The record revenues resulted mainly from booming shipments of e-paper and FFS (fringe field switching) LCD panels produced by its Korea-based subsidiary Hydis, E Ink said.
To meet growing demand for e-paper, E Ink said it will soon start sourcing e-paper backplanes from Chunghwa Picture Tubes (CPT). Chimei Innolux (CMI) is a major backplane supplier for E Ink.
E Ink December revenues may exceed NT$3 billion [Dec 15, 2010]
One of the main reasons EIH’s revenues in the fourth quarter will increase significantly is support from Chimei Innolux’s (CMI’s) 5G plant. EIH started to receive TFT-LCD back panels from CMI’s 5G plant in the third quarter, and the usage of panels from CMI exceed all the capacity of EIH, including the capacity from its Korea subsidiary Hydis, in the fourth quarter.
E Ink 4Q10 revenues may reach NT$9 billion [Nov 11, 2010]
E Ink chairman Scott Liu indicated that the company’s operating strategy is to be a panel maker without production fabs, distributing capacity to others while E Ink is in charge of taking orders and shipments. This is the only way for E Ink to set new revenues and profit records with its limited capacity, he added.
E Ink holds on to its principles of not investing high capex on capacity expansion, instead E Ink looks for partners. Under the company’s strategy, E Ink is able to showcase not only its e-paper products but also FFS panels from Hydis and e-paper products from Surf, Hanvon and Epson at the ongoing FPD International 2010 in Makuhari, Japan, from November 10 to 12.
In addition to e-paper, demand for tablet PCs is also strong, Liu said that 80% of Hydis’ capacity is now producing FFS panels, but the supply is still unable to meet demand from clients. For that, Hydis will start outsourcing small volumes of FFS panels in November, he added, noting that Hydis will actively adjust its yield rates in order to improve production to meet demand.
Global sales of 20-25 million e-book readers projected for 2011, says E Ink chairman [Oct 28, 2010]
Current supply of EPD panels for e-book readers and FFS panels for smartphone and tablet PCs is shorter than demand in the market. Liu added that the proportion of TFT array backend panels from Chimei Innolux (CMI) has exceed the proportion of its in-house production, and EIH plans to increase outsourcing of TFT array backend panels to other panel makers in November due to surging demand for both EPD and FFS.
…
In terms of FFS panels, orders from first-tier vendors started shipping in September and shipments are expected to increase significant in the fourth quarter. Orders from first-tier vendors are the major revenue sources of Hydis, Liu noted.
E Ink to increase production of FFS panels at Hydis [Aug 11, 2011]
Taiwan-based electrophoretic display (EPD) maker E Ink Holdings will increase the production of FFS (fringe filed switching) panels at its Korea-based subsidiary Hydis to 75% of its total capacity from 50% amid surging demand for better display solutions from the mobile device market, according to the company chairman Scott Liu.
As in-house production of TFT backplanes at Hydis will decrease, E Ink is purchasing backplanes from Chimei Innolux (CMI), Liu noted, adding that CMI has started using its 5G plant to supply backplanes to E Ink in August. CMI’s 5G capacity will be enough to fulfill I Ink’s demand for backplanes, he said.
PVI to take measures to increase production efficiency [May 20, 2010]
Since Prime View International (PVI) currently does not have plans to expand its LCD panel capacity, the company plans to take measures to increase its LCD panel production efficiency at its lines in Hydis’ plant so as to increase output, according to PVI.
PVI chairman Scott Liu indicated that it will cost about US$5 million to improve the production efficiency at Hydis.
Meanwhile, the company also plans to cooperate with Chimei Innolux (CMI) in the third quarter for e-book reader panel supply, using CMI’s 5G production plant, the company noted.
PVI is not concerned about TFT-LCD panel supply due to its relationship with LG Display and CMI, and the company will mainly concentrate on expanding capacity for e-paper material at E-Ink and EPD back-end module production at its China subsidiary Transcend Optronics in Yangzhou, Liu said.
PVI subsidiary Hydis sees operation turn profitable [May 14, 2010] (emphasis is mine)
South Korea-based TFT-LCD panel and EPD maker Hydis Technologies, a subsidiary of Taiwan-based Prime View International (PVI), saw its operation swing to profits in April from continued losses for five years and eight months, according to PVI chairman Scott Liu.
Liu indicated that Hydis already saw net profit in the fourth quarter of 2009 when non-operating income of licensing fees from in-house developed FFS (fringe field switching) technology was included.
PVI injected much needed funding into PVI, allowing it to develop its FFS technology, Hydis said. PVI also brought along EPD orders to help improve Hydis’ productivity, it added. PVI took over Hydis in 2008.
To maintain its profitability, Hydis said it is adjusting its product mix to produce more EPD and FFS products, raising its yield rates and lowering production costs. It said the yield rates for handset and notebook panels have improved to 90% from previous 60-70%.
Prime View International, HYDIS Technologies and LG Display Launched Comprehensive Cooperation [Dec 28, 2009]
Prime View International Co. Ltd.,(“PVI”) (8069.TW), the world’s largest supplier of ePaper Display modules, HYDIS Technologies Co. Ltd., a subsidiary of PVI, and LG Display Co., Ltd., (NYSE:LPL, KRX:034220), a leading innovator of TFT-LCD technology, announced that the parties agreed to launch comprehensive cooperation on technologies, capital, andsourcing collaboration today.
The parties will co-develop global display market, elevating collective competitiveness and maintain leading position in the segmented industry.
Sharing long-term innovative initiatives and vision, LG Display will invest in HYDIS technology through USD30.5 million corporate bonds. Furthermore, both companies have entered into a cross license agreement, including FFS technology developed by HYDIS, as part of the comprehensive cooperation.
The two parties will also mutually support production capacity on certain ePaper and high-end TFT-LCD to promptly respond to growing market demand and to achieve higher cost efficiency. Accordingly, LG Display will provide consulting to HYDIS on production efficiency and quality.
Meanwhile, LG Display and PVI, the holding company of HYDIS are also strengthening cooperative ties. As recognition for PVI’s ePaper display leadership, LG Display has invested USD10 million in PVI’s GDR issuance in December, 2009.
In accordance with its commitment, LG Display and PVI will further collaborate on material sourcing in addition to technologies and productions. Previously, LG Display had also signed a supply agreement with E Ink Corporation, subsidiary of PVI – aiming to develop the ePaper market together. E Ink will expand customer base and increase market share, while LG Display can enjoy a stable supply from E Ink. Through such sourcing collaboration, ePaper eco-system is expected to be further expanded.
Young Soo Kwon, LG Display’s President and CEO, noted, “The cooperation is expected to contribute significantly to our ability to take an early lead in one of our future growth business ePaper Display market. We have high hopes that this win-win collaboration will generate major synergies to solidify leading positions in Display industry for all of us.”
Scott Liu, Chairman and CEO of PVI, said, “The comprehensive cooperation between PVI and LG Display, will not only enable both parties to maintain the leading position in ePaper, and high-end TFT-LCD markets, but together, we can meet all foreseen future market demands and challenges with excellence.”
About Prime View International Group
Founded in 1992 by Taiwan’s leading paper making and printing group YFY (1907.TW), Prime View International (“PVI”) (8069.TW) is the pioneer TFT and ePaper business in Taiwan. Its corporate philosophy aims to deliver revolutionary products, user experiences, and environmental benefits through advanced technology development. This vision has led to its continuous investments in the field of ePaper Display as well as its 2008 acquisition of Hydis Technologies, manufacturer of the world’s best wide viewing angle LCDs, and its 2009 acquisition of E Ink Corporation, major supplier of the innovative electronic ink. PVI also manufactures small and medium size LCD modules.HYDIS Technologies, a subsidiary of PVI, developed a unique, patent FFS technology which offers many superior features for TFT-LCD, including wide viewing angle and the readability under sunlight. This technology has been applied in the latest display products including display modules of high-end mobile phones, navigation systems, and tablet computers.
E Ink Corporation, also a subsidiary of PVI, is the world’s leading supplier of electronic paper display (EPD) technologies. E Ink’s technology is ideal for many consumer and industrial applications spanning handheld devices, eBooks, eNewspapers, PC accessories, public information displays and promotional signage. PVI group is now the world’s largest ePaper module maker supplying Displays to the eBook market including the popular Amazon Kindle, Sony Reader, and Barnes&Noble Nook.
About LG Display
LG Display Co., Ltd. [NYSE: LPL, KRX: 034220] is a leading manufacturer and supplier of thin-film transistor liquid crystal Display (TFT-LCD) panels, OLEDs and flexible Displays. The company provides TFT-LCD panels in a wide range of sizes and specifications for use in TVs, monitors, notebook PCs, mobile products and other various applications. LG Display currently operates eight fabrication facilities and five back-end assembly facilities in Korea, China and Poland. The company has a total of 30,000 employees operating worldwide.
| November 21, 2007 HYDIS names Taiwan-based Prime View Consortium as preferred bidder |
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PVI has entered into a binding memorandum of understanding to acquire BOE Hydis [Nov 21, 2007]
The combined capacity is expected to exceed all local small to medium size TFTLCD makers
Hsinchu, Taiwan (November 21, 2007) – Prime View International Co., Ltd. (“PVI”, 8069.TW), one of the leading small to medium sized TFT-LCD panel players in Taiwan announced that it has entered into a binding memorandum of understanding (“MOU”) to acquire South Korean based BOE Hydis Technologies Co., Ltd. (“Hydis”) (“Transaction”). The PVI led Consortium will inject KRW260 billion (approximately US$285 million or NT$9.3 billion) to acquire an approximate 95% stake in Hydis subject to the relevant regulatory approvals. The Transaction is expected to generate significant operational synergies to PVI at a time of global supply shortage in small to medium sized TFT-LCD panels.
In September 2006, due to insufficient working capital, Hydis filed for bankruptcy to the bankruptcy court in Korea. Subsequently, a corporate rehabilitation plan was approved by the court in May this year. Since then, Hydis has managed to gradually return to its normal operational capacity. In September, the court initiated a sale process for Hydis. PVI, together with two other Hong Kong Stock Exchange listed consortium members, Alco Holding Limited (328.HK) and Varitronix International Limited (710.HK), was successfully awarded preferred bidder status after two rounds of bidding.
Operating with only one Gen2.5 TFT-LCD fab, PVI has achieved outstanding results by being profitable for the past seven consecutive quarters. This is an unique achievement compared to the larger players within the industry. PVI’s current strategy has been to outsource TFT-LCD panels to compensate for its limited internal capacity. With its e-Paper business and niche TFT-LCD products experiencing phenomenal growth, PVI is expecting even stronger demand in the years to come. Given the positive outlook, PVI has been surveying opportunities for M&A or strategic partnership with TFT-LCD makers around the globe to secure the capacity for these products.
Hydis currently operates three TFT-LCD fabs comprising of Gen2.5, Gen3, and Gen3.5, with monthly capacity of 16K, 14K, and 67K, respectively. The additional capacity that Hydis offers is perfectly aligned with PVI’s strategic objectives. The total capacity of Hydis is estimated to be four times of PVI’s existing capacity and 2.5 times of CPT’s Gen3 fab that was recently sold to GiantPlus. Due to its proprietary AFFS wide viewing angle technology, Hydis is one of the leading supplier to top tier display companies worldwide. Dr. Scott Liu, Chairman of PVI said “Upon completion of the acquisition, PVI will become the major supplier of small to medium sized TFT-LCD panels in Taiwan. Apart from being strategically well positioned to capture the explosive growth of the small to medium sized TFT-LCD space, Hydis and PVI will jointly leverage off the expanded customer base in an effort to further develop the niche market by offering an enlarged selection of products. As a result, the Transaction will benefit all parties alike, including Hydis, PVI and their respective customers.”
As part of the KRW260 billion, KRW156 billion (60% of total consideration) will be used to acquire newly issued common shares while the remaining KRW104billion (40%) will be used to subscribe to a corporate bond (5-year maturity, 4% annual coupon rate) issued by Hydis. According to the MOU, the proceeds raised by Hydis will be fully utilized for the repayment of its existing debt owed to creditors. Hydis is expected to become a debt-free company after the Transaction, whose regular operation and development potential can be fully realized. It is the intention of the Consortium members to form a joint venture prior to the closing of the Transaction as a holding vehicle for the Hydis investment. It has been agreed amongst the Consortium members that PVI will own 78% of the future joint venture while Alco and Varitronix will each own 11% .
The signing of the MOU has been approved by the PVI board of directors this morning. The purchase price is subject to relevant regulatory approvals as well as confirmatory due diligence. Given all Transaction related approvals will take approximately two to three months to complete, therefore, closing of the Transaction is expected by the end of first quarter 2008.
Credit Suisse acted as the exclusive financial advisor for PVI and its consortium members in connection with the above Transaction.
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About PVI
Established in June 1992, PVI is the leading maker of small-to-medium-sized TFT-LCD as well as e-Paper display products. As a pioneer of TFT-LCD technology in Taiwan, PVI established Taiwan’s first TFT-LCD factory in Hsinchu, Taiwan in 1994. PVIs TFT-LCD products have a wide range of uses, from consumer electronic devices, such as DVD players, mobile phones, global positioning devices, to industrial applications for use in the aviation and maritime industries. PVI is the global leader of eBook device with Tier one customers such as SONY, iRex and, most recently, Amazon. Its tradition of innovation now continues with the groundbreaking development and commercialization of flexible e-Paper Displays. PVI is listed in Taiwan Stock Exchange with code number 8069.About Alco Holdings Limited
Founded in 1992, Alco Holdings Limited (“Alco”) a major provider of Electronics Manufacturing Services (EMS) to leading Original Equipment Manufacturers (OEMs) for diverse electronics products. Alco has five production sites in Dongguan, China, to cover electronics production, plastic molding/injection, advanced packaging, and other industrial manufacturing. Certificates held by the Company include ISO 9000:2000 and ISO 14000. The Company has been listed on the Stock Exchange of Hong Kong since 1992 (stock code: 328.HK). Please visit http://www.alco.com.hk for more information.About Varitronix International Limited
Established in 1978, Varitronix International Limited (“Varitronix”) is one of the world’s leading manufacturers of small to medium size liquid crystal displays (LCDs). Varitronix serves customers around the world through its extensive sales network. Its manufacturing bases are located in Shenzen and Heyuan, Guangdong Province. Varitronix holds ISO 9001, TS 16949 and ISO 14001 accreditation. The Company has been listed on the Stock Exchange of Hong Kong since 1991 (stock code: 710.HK). Please visit http://www.varitronix.com for more information.About BOE Hydis
BOE Hydis is one of the world’s leading manufacturers of TFT-LCD panels. It launched its operations as Hyundai Electronic’s LCD business division in 1989. In 2001, the company was spun off from Hyundai and was renamed as Hydis. Hydis was acquired by BOE Group of China in 2004. The company went into financial difficulty in September 2006 and has since been under court receivership. In May 2007, the Korean court approved the company’s current financial rehabilitation plan. Located in Icheon, South Korea, BOE Hydis is the home of a R&D center where research and development activities are undertaken by 260 staff members. Please visit http://www.boehydis.com for more information.
Company [Alco Holdings Group] History (emphasis is mine)
1968 – 1985
- Alco Electronics was founded by Mr. Kimen Leung in 1968 to manufacture AM/FM radios with a workforce of 150 people.
- Increased production capacity by occupying the present premises in Quarry Bay and branch factories in Kwai Chung.
- Established Alco Plastic and Advance Packaging, to provide plastic parts and polyfoam packaging materials for the use of the Group.
1986 – 1992
- In 1986, relocated part of its production capacities from Hong Kong to Changan Town, Dongguan City in China under the name of Commusonic.
- In 1987, established a new factory in Houjie Town, Dongguan City with the addition of plastic injection and polyfoam moulding operation.
- In 1992, Alco Holdings listed on The Hong Kong Stock Exchange.
1993 ONWARDS
- Expansion of production facilities in Houjie Town to 2 million sq.ft.
- Expansion of production facilities in Changan Town to 320,000 sq.ft.
- In 1994, established Alco Communications to design and manufacture telephone products, with its production capacity located in Houjie Town, Dongguan City.
- In 2001, established R&D Centers in Houjie & Shenzhen.
- In 2003, accredited ISO 9000:2000.
- In 2004, Alco Electronics Houjie Factory accredited ISO 14000.
- Currently Alco manufactures a variety of audio-visual products. These products include portable DVD player, LCD-TV, DVD home theatre system, Mini hi-fi system with multi-CD changers, MD recorder system, CD boombox, CD clock radio, car audio, personal CD and karaoke. In addition, we also manufactures various models of telecommunication products, including DECT (Digital Enhanced Cordless Telecommunications) and 2.4G cordless phones.
- To align with our direction towards the development of new sophisticated high end products, we now have a team of specialized and seasoned engineers including product designers around the globe to ensure our products meet the ever-changing technologies in the electronics industry.
Varitronix International Limited report for the fiscal year
ended 31 December 2008, page 4, 5, 6 and 7:
Our products range from high-end automotive and industrial displays to consumer grade mobile phone displays, while our reach extends from Europe to Asia, which includes the market of Mainland China showing great growth potential.
In reward of our concentrated efforts over the years, we have established Varitronix as one of the leading suppliers of automotive and high-end industrial displays globally. Although customers from these market segments can be very demanding, with long product delivery time and limited quantities, they do provide a steady flow of orders. In contrast, consumer products customers tend to be less demanding, with short delivery time and large orders that result in quick cash turnover. However, the consumer sector offers narrower profit margins amidst a more volatile operating environment. By focusing equally on the high and the lower end markets, we believe the Group can benefit from the complementary nature of both segments.
…
During the period under review, the Group finalised the acquisition of an 11% share in Hydis Technology Co., Ltd. (“Hydis”), a South Korean TFT (Thin Film Transistor) panel manufacturer, thereby securing a stable supply source of TFT panels, especially those high quality TFT panels that fit into the Group’s targeted automotive and high-end display sectors. The restructuring of Hydis has now been completed, and TFT demand is gradually increasing after market adjustment. The business is in a good position to benefit from increased market opportunities for TFT panels in 2009.
…
TWO-PRONGED PRODUCT STRATEGY
The Group will continue to focus efforts in the automotive and high-end industrial display sector. We believe that the potential of the Asian automotive market will make up for sluggish sales in Europe and America. Resources will be dedicated to R&D in order to improve the design and performance of our highend displays. To facilitate the implementation of this strategy, the new production line purchased in 2008 is now in operation.
Another key area of development is displays in mobile handsets and consumer products. The non-branded handset display segment in the Mainland China market has shown signs of recovery towards the end of 2008, with new orders coming in. The consumer trend for fashionable and innovative mobile handsets has shown no sign of abating in Mainland China. This, together with the demand from consumer products in South Korea and other consumer products exported to developing countries from Mainland China, will continue to drive growth in our business.
…
There was an increase in payment for purchase of fixed assets to HK$195 million (2007: HK$148 million) and acquisition of an 11% stake in Hydis of HK$213 million (2007: HK$12 million).
(Emphasis is mine)
Varitronix Enters into a Binding MOU to Acquire
South Korean TFT Manufacturer – BOE Hydis
[22 November 2007 – Hong Kong] Varitronix International Limited (“Varitronix”; Stock code: 710) has formed a Consortium with Prime View International Co., Ltd. (“PVI”, TW.8069), one of the leading small to medium sized TFT-LCD panel manufacturers in Taiwan and Alco Holdings Limited, (“Alco”, HKSE: 328) a major provider of Electronics Manufacturing Services (EMS) in Hong Kong. The Consortium has signed a binding memorandum of understanding (“MOU”) to acquire South Korean based BOE Hydis Technologies Co., Ltd. (“Hydis”), and will inject KRW260 billion (approximately HK$2,193.88 million) to acquire an estimated 95% stake in Hydis subject to the relevant regulatory approvals. The Consortium was awarded preferred bidder status after two rounds of bidding.
The market for small to medium-sized TFT panels continues to grow at an exponential rate. According to forecasts made by DisplaySearch 2005, worldwide TFT shipment volume for mobile phones is expected to grow by 27% per annum between 2004 and 2009. In view of the current vibrant TFT market and the short supply of small-size TFT-LCD panels, the Consortium members believe the proposed acquisition provides a steady supply of small-size TFT-LCD panels for their manufacturing businesses in certain related electronic products.
Mr Tony Tsoi, Chief Executive Officer of Varitronix commented, “Varitronix provides a range of industrial and consumer grade small to medium sized TFT modules suitable for a multitude of applications. Our competitive edge lies in the custom designed and diversified module production and we will enjoy further design flexibility leveraging on the stable TFT panel supply source, which will in turn benefit the expansion of our TFT business.”
Hydis currently operates three TFT-LCD manufacturing lines comprising of Gen 2.5, Gen 3, and Gen 3.5, with monthly capacities of 16K, 14K, and 67K, respectively. Due to its proprietary AFFS (Advanced Fringe Field Switching) wide viewing angle technology, Hydis is one of the leading supplier to top tier display companies worldwide.
Mr Tsoi added, “Our cooperation with Hydis in the past few months was smooth and fruitful. Based on this mutual understanding, we believe the proposed acquisition will bear concrete lucrative results for the companies involved.”
It is the intention of the Consortium members to form a joint venture prior to the closing of the Transaction as a holding vehicle for the Hydis investment. It has been agreed that PVI will own 78% of the future joint venture while Varitronix and Alco will each own 11% respectively. Given all Transaction related approvals will take approximately two to three months to complete, finalizationof the Transaction is expected by the end of the first quarter of 2008.
— End —
About BOE Hydis
BOE Hydis is one of the world’s leading manufacturers of TFT-LCD panels. It launched its operations as Hyundai Electronic’s LCD business division in 1989. In 2001, the company was spun off from Hyundai and was renamed as Hydis. Hydis was acquired by BOE Group of China in 2004. The company went into financial difficulty in September 2006 and has since been under court receivership. In May 2007, the Korean court approved the company’s current financial rehabilitation plan. Located in Icheon, South Korea, BOE Hydis is the home of a R&D center where research and development activities are undertaken by 260 staff members. Please visit http://www.boehydis.com for more information.
About Varitronix
Established in 1978, Varitronix is one of the world’s leading manufacturers of small-to-medium-sized liquid crystal displays (LCDs). Varitronix serves customers around the world through its extensive sales network. Its manufacturing bases are located in Shenzhen and Heyuan, Guangdong Province. Varitronix holds ISO 9001, TS 16949 and ISO 14001 accreditation. The Company has been listed on The Stock Exchange of Hong Kong since 1991 (stock code: 710). Please visit www.varitronix.com for more information.
About PVI
Established in June 1992, PVI is the leading maker of small-to-medium-sized TFT-LCD as well as e-Paper display products. As a pioneer of TFT-LCD technology in Taiwan, PVI established Taiwan’s first TFT-LCD factory in Hsinchu, Taiwan in 1994. PVI’s TFT-LCD products have a wide range of uses, from consumer electronic devices, such as DVD players, mobile phones, global positioning devices, to industrial applications for use in the aviation and maritime industries. PVI is the global leader of eBook device with Tier one customers such as SONY, iRex and, most recently, Amazon. Its tradition of innovation now continues with the groundbreaking development and commercialization of flexible e-Paper Displays. PVI is listed in Taiwan Stock Exchange with code number 8069.
About Alco Holdings Limited
Founded in 1992, Alco Holdings Limited (“Alco”) a major provider of Electronics Manufacturing Services (EMS) to leading Original Equipment Manufacturers (OEMs) for diverse electronics products. Alco has five production sites in Dongguan, China, to cover electronics production, plastic molding/injection, advanced packaging, and other industrial manufacturing. Certificates held by the Company include ISO 9000:2000 and ISO 14000. The Company has been listed on the Stock Exchange of Hong Kong since 1992 (stock code: 328). Please visit www.alco.com.hk for more information.
Varitronix Secures Stable Supply of TFT Panels for Business Expansion Through Long-term Supply Agreement with BOE HYDIS [July 7, 2007]
[18 July 2007 – Hong Kong] Varitronix International Limited (“Varitronix”; Stock code: 710) signed a long-term Thin-Film Transistor (TFT) panel supply agreement with Koreanbased TFT manufacturing company BOE HYDIS. The strategic partnership strengthens the supply of small to medium-sized TFT panels for Varitronix, facilitating its business expansion in the TFT-LCD manufacturing business.
The market for small to medium-sized TFT panels continues to grow at a fast pace. According to forecasts made by DisplaySearch 2005, worldwide TFT shipment volume for mobile phones is expected to grow by 27% per annum between 2004 and 2009. The acquisition of a steady supply of high quality TFT panels is a critical factor for success in
this thriving and highly competitive market.BOE HYDIS has been involved in developing, manufacturing and supplying TFT-LCD products since 1996. BOE HYDIS runs three TFT-LCD production lines that specialize in high-end, small to medium-sized applications. The manufacturer has the expertise to develop the most advanced products with its unique Advanced Fringe Field Switching
technology.Mr Tony Tsoi, Chief Executive Officer of Varitronix, commented during the agreement signing ceremony, “Varitronix will be a strategic partner to BOE HYDIS, providing market access and financial support to the company. In return, BOE HYDIS will be one of our key suppliers of TFT panels, providing a secure supply amid the fast growing small to medium-sized TFT-LCD market. With this stable supply source, we will have greater flexibility in designing diversified products to meet customer demand.”
“We believe that, after the financial restructuring in May 2007, BOE HYDIS is financially stronger than before. With an experienced management team, BOE HYDIS remains committed to developing cost-efficient and technologically advanced TFT panels. Given the favourable market sentiment, the restructuring plan of BOE HYDIS is timely, and we believe its prospects are promising,” added Mr Tsoi.
Mr Hae Sung Park, President and Chief Executive Officer of BOE HYDIS, said, “We are pleased to enter into a long-term cooperation agreement with Varitronix, which has been one of the world’s most successful LCD display companies. The ties will be beneficial for the sustained growth of both companies.”
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