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You are here: Home / Business Briefing / Kindle Technology Goes To Taiwan
Kindle Reader Technology Goes To Taiwan-Based PVI
Kindle Reader Technology Goes To Taiwan-Based PVI
By Patricia Resende / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
The display company behind Amazon's Kindle electronic reader is being acquired. Prime View International, a Taiwanese-based business, is acquiring E Ink for $215 million, according to the companies.

PVI is providing an equity placement and a convertible bond led by KGI, a Taiwanese securities company. The deal is expected to close in the fourth quarter, once regulatory approvals are met.

PVI and Cambridge, Mass-based E Ink have collaborated over the past few years by developing the e-book displays of the Kindle, Sony Reader and now the Kindle DX, which is slated to be available June 10. Since launching in 1997, E Ink has captured the attention of investors who provided a total of $150 million in funding.

PVI has been on an acquisition path in the last several years to increase the development of its electronic paper business. In 2008, PVI bought a 74 percent stake in Hydis Technologies of Korea, which boosted the company's capacity. Before that, PVI acquired the e-paper business of Phillips Electronics.

On The Agenda

Acquiring E Ink was a natural progression for the company.

"It's good news on all fronts," said Srira Peruvemba, vice president of marketing at E INK. "From a product-development standpoint, this will accelerate our ability to bring out color and flexible display."

Both companies were working independently on color and flexible display with some collaboration. Each company, however, has had to file separate patents along the way. Now, according to Peruvemba, they can focus on the same developments and better attack the market as one entity.

Once combined, the new entity will begin working on flexible displays for e-readers.

"You can have a newspaper device that will be dropped on the floor and it will not shatter; this is the fundamental advantage with flexible displays," Peruvemba added.

The company also plans to go after the newspaper market to provide displays which allow viewers to not only see content in color, but advertisements as well.

Logistically, E Ink's executive would not say what could happen to the companies' locations in the Bay State and in Taiwan, other than to say E Ink's headquarters will remain in Cambridge. "It is too early to tell," Peruvemba said. "We will start behaving like one company soon."

Peruvemba, however, did say the growing demand for its displays will force the opening of additional manufacturing facilities.

Taking Off

The market is expanding. Both companies support nearly 20 e-book manufacturers worldwide. Along with e-books, E Ink's film is used in cell phones, signs and smartcards. In the past 18 months alone, the two companies combined have shipped more than one million e-book displays.

E Ink posted $18 million in sales in the first quarter of this year, a 157 percent increase over the same period in 2008, and its employment has grown. In its Cambridge-based office, E Ink grew its employee base from 125 to 150 people this year.

"As you know, people were still questioning if the e-book market will really take off, and now they are looking at this as 'Wow, this has exponential growth,'" Peruvemba said.

The market for e-book products such as those from Sony and Amazon is expected to grow from 1.1 million units in 2008 to 20 million units in 2012, according to iSuppli analyst Vinita Jakhanwal. "I think it is a very good move for both companies," she said in an interview. "They have been working together for four years now and the technology is strong."

Jakhanwal said for E Ink, the acquisition will help bring its color solution to market more quickly. "PVI can invest more money and has acquired more LCD factories, so it has enough capacity to help target the growing market," she said.

The long-term goal is to work on the killer app, which is in the electronic textbooks, according to Peruvemba. "We can now make that not only in color but include animations," he said.

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