LG.Philips LCD Co. Ltd. last week said it has signed a 10-year purchasing agreement worth up to $1 billion for thin-film-transistor (TFT) LCD panels to be used in U.S. military and commercial aircraft cockpits.
The deal is one of the largest flat-panel purchasing agreements to date in the avionics industry, and is particularly noteworthy because it was brokered between the U.S. military and a foreign LCD-module vendor.
The Korean-based joint venture of LG Group and Philips Flat Display Systems, San Jose, will supply the modules to American Panel Corp. of Ocala, Fla. APC will then incorporate the panels into cockpit displays to be sold to Lockheed Martin Corp. and Boeing Co. for military and commercial aircraft applications.
Though it has long sought to maintain a domestic supply base, the lack of production sources in the United States has forced the Pentagon to turn to offshore manufacturers. The sole U.S. partnership, an alliance between Planar Systems Inc. of Beaverton, Ore., and Palo Alto, Calif.-based dpiX LLC, provides only a limited number of TFT LCDs to the Department of Defense.
Because of the supply issue, the DOD has agreed to accept foreign-made modules as long as they are fabricated into displays by a U.S. OEM.
Typical of such long-term supply agreements, there are no guarantees that orders in the decade will reach the full $1 billion target. However, Bruce Berkoff, LG.Philips' executive vice president, said the avionics-display market is growing fast, especially for commercial aircraft.
"Whatever the level of sales, we expect the agreement with American Panel will represent significant business over the 10-year period," he said.
Billion-dollar supply contracts for FPD panels were signed in the PC industry last year, notably by Apple Computer Inc. and Dell Computer Corp., both of which turned to Korean supplier Samsung Electronics Co. Ltd. But the aircraft display market until now has been a much lower priority for volume manufacturers, which over the years have bemoaned the sector's low volumes and sporadic orders.
Adding another wrinkle to the deal, the LG.Philips agreement includes the use of new polysilicon TFT LCD panels, as well as conventional amorphous silicon FPDs that are found in most cockpits. Berkoff said LG.Philips is using a proprietary positive-channel PMOS technology that requires 30% less processing than other CMOS polysilicon TFT LCDs.
He said this lowers the cost significantly for poly panel production, which is said to yield more rugged, higher resolution displays than traditional amorphous TFT LCD technology.
Another Philips' FPD joint venture, with Hosiden Corp. in Japan, also makes traditional amorphous silicon panels for commercial aircraft cockpit displays, of which Honeywell is a major customer.
Separately, LG Electronics Co. Ltd., which once oversaw commodity flat-panel operations for the LG Group, has re-surfaced in the market by developing field-emission-display (FED) technology.
Two years ago, it spun off its display operations, which later joined with Philips to form LG.Philips LCD. LG Electronics, however, continued FED research, and has signed a joint technology development deal with eMagin Corp., Hopewell Junction, N.Y. Under the agreement, eMagin will provide processing services for LG-designed FED panels.