Three-Five Systems Inc. is attempting to achieve a solid position in the organic light-emitting-diode (OLED) display market through an agreement with OSRAM Opto Semiconductors GmbH.
Under the agreement, Three-Five will market OSRAM's standard OLED displays and provide design engineering services to help integrate OSRAM's technology into custom OLED modules designed by Three-Five.
OSRAM, a wholly owned subsidiary of Osram, a lamp supplier in Regensburg, Germany, will maintain its independent marketing, sales, and integration channels.
"We looked at several opportunities to engage in joint OLED agreements," said Mike Amick, director of strategic sourcing at Three-Five, Tempe, Ariz. "We're impressed with OSRAM's progression from R&D to imminent production in their Penang, Malaysia, plant."
Known principally as an LCD and microdisplay supplier, Three-Five is looking to leverage its manufacturing and integration capabilities for OLEDs, Amick said. OLED applications are emerging in wireless handsets, pocket PCs, and PDAs, he noted.
Global OLED display revenue is expected to grow at an 88% compound annual rate, from $85 million in 2002 to $3.1 billion in 2007, according to DisplaySearch Inc., Austin, Texas. Global OLED display shipments are slated to jump from 6.8 million to 180 million over the same period.
This is not Three-Five's first OLED venture. The company has for several years maintained a joint OLED development relationship with DuPont Displays, a business unit of DuPont Corp., called Three-D OLED. But that arrangement is currently inactive, according to Liz Sharp, a Three-Five spokeswoman.
Three-Five might stand a better chance with OSRAM, which was granted a license from Cambridge Display Technology in 2001 to build and sell polymer OLED displays at its 37,800-sq.-meter plant in Penang. The plant is ramping up OLED display production from evaluation quantities to volume production by mid-2003, an OSRAM spokesman said.
The agreement is Three-Five's latest move to improve profitability by shifting from commodity LCDs to higher-margin products such as microdisplays, according to James Ricchiuti, an analyst at Needham & Co. Inc., New York.
To achieve this, the company has acquired display IP from Inviso Corp. and Zight Corp., and formed a development agreement with China Display Digital Image Technology Co. Ltd.
In December, Three-Five also added to its prototype display capability by acquiring ETMA, a Redmond, Wash., EMS provider with several biomedical and server customers, for $38 million.