A Philips spokesperson confirmed an Insight Media report stating that the company Philips would shut down its LCOS panel foundry and stop production of LCOS engines and rear-projection display TVs. Two hundred jobs would be affected in Brussels, Belgium; Boeblingen, Germany; Briarcliff Manor, N.Y.; and Vienna, Austria.

The spokesperson said Philips was no longer willing to make the necessary investments in LCOS technology as microdisplays move toward commodity status. Philips said it believes its share of the rear-projection TV market was too small, and that it lacked the scale to bring these products to market.

Philips' exit from the microdisplay business did not surprise Insight Media analyst Chris Chinnock.

"We knew things were in a critical mode for awhile," Chinnock said. "A year ago we said there are too many LCOS players choosing too few design wins."

Philips also experienced low yields on manufacturing its 1.18-inch microdisplay, though was moving to shrink the panel size when the company pulled the plug on the business, Chinnock said.

"When you get a microdisplay that big, defects can kill a device," he said. "They [Philips] had begun to tool a shrunken down microdisplay with a 0.9-in. panel size."

Chinnock added that Philips' LCOS-based, rear-projection TVs were at a competitive disadvantage in that they could only achieve 1280- x 720-pixel resolution. Other microdisplay suppliers were developing TVs capable of showing 1920 x 1080 pixels.

The Philips spokesperson said the company will consider alternative microdisplay solutions, including Texas Instruments' digital light processing technology.