All three e-readers use the same size and resolution display: a 5.7” XGA format (1024 × 768 at 223 ppi). The Shanda-branded e-reader is named Bambook Sunflower, to emphasize its good sunlight readability, and will be available in February. The availability of the Hanvon C18 e-reader has not yet been announced.

Figure: Hanvon E-Reader Featuring the Qualcomm mirasol Display

The mirasol displays used on the current e-readers are produced in the Gen 4.5 fab that Qualcomm and Foxlink have been operating since mid-2009. Qualcomm has invested about $1 billion to build its fully-owned Gen 4.5 fab, which is expected to be operational in 2012.

Now, CES 2012 is shaping up to be all about ultrabooks.  Intel launched the ultrabook category in May 2011, and most of the new ultrabook introductions at CES fit within Intel’s initial descriptors of the category: a super thin form factor, no optical drives, and designed around a mobile Intel chipset. However, they’re all shaping up to be Apple MacBook Air clones in terms of design and usage.

As computer OEMs struggle to put out products as streamlined as the MacBook Air and as game-changing as the iPad, a hybrid solution has been introduced. Enter Lenovo. With its IdeaPad Yoga, Lenovo has combined form factors to create a market crossover. The IdeaPad Yoga has a 13.1-inch display with a 360-degree flip-and-fold design, allowing the consumer to convert the ultrabook into a touch-screen tablet using a hinged case.

The clever attempt at naming it aside, Lenovo’s ultrabook + tablet strategy is not likely to hamper Apple’s iPad momentum.  At this point, consumers are just wrapping their brains around how to use tablets. Throwing a new product category into the mix just creates confusion. Tablets will remain the stronger growth category over ultrabooks in 2012, and the iPad will continue to be the true game-changer.

From the touch perspective, the fifth core enables what the company calls “Direct Touch.” This performs direct analog-to-digital conversion of touch input in the processor rather than through a separate controller. Omitting a controller dedicated to touch would theoretically lower the cost of the device and consume less power than a device with a separate controller. Nvidia also said that Direct Touch can process three times the number of samples per second over a separate controller, which would improve the responsiveness of the device.

In addition, Nvidia highlighted Prism Display Technology that dynamically determines how much backlighting is needed on a frame-by-frame basis, and then turns on pixels as an alternative to lower the backlight usage. Given some of the anecdotal concerns we’ve heard about battery life in iPad 2 tablets with iOS 5 and touch screen performance issues with the Kindle Fire, these new features seem timely.

The display contains 6 million LEDs (1920 × 1080 × RGB) which may have required breakthroughs in LED device size, mounting, and driving technologies. The performance looked impressive compared to an LCD, and according to Sony’s press release, it has 400 nits brightness, more than 100% of NTSC color gamut, and very high contrast. One might expect this technology to be quite power-hungry, but Sony claims it uses only 70W.

This development, while surely at an early stage, adds some interest to the technology race for large-size flat panel TVs, especially given the buzz around 55” OLED TVs from LG and Samsung. It is also an ironic development, considering that when Samsung first started promoting LED backlights for LCD TVs back in 2009, they positioned it as “LED TV.” We called this into question, and these days most consumers understand that the LED refers to the backlight, not the display. If Crystal LED comes to market, industry might need to re-educate consumers.

Samsung emphasized that it is using RGB color patterning, which means that it has made progress on organic material deposition techniques. The RGB color approach is in contrast to LG’s white OLED that uses a color filter method. LG’s demonstration of its 55” AMOLED TV was not a surprise, since LG had already announced the TV last month along with its plans to commercialize the 55” AMOLED TV in 2012.

Figure: Samsung Showcases 55” AMOLED TV at the CES 2012 Press Conference

Progress has been made in many areas of OLED technology, including organic materials, color patterning, electronic driving methods, and encapsulation. OLED is now ready to enter large-size TV applications. However, the ability to scale OLED display manufacturing to fabs larger than Gen 5.5 has yet to be demonstrated. Additionally, the cost of larger panels is not yet clear. What is clear is that there will be a lot of completion in 2012 for bragging rights over large-size OLED TVs.

In addition, LG showed a camera accessory, similar to the Microsoft Kinect, that connects to the TV and allows for 3D gesture recognition. Although no demonstration was available at the press conference, we’ll try to get the device on the show floor to recognize us. In combination with the recent announcement of its Google TV partnership, LG seems committed to investing in smart TV.

It seems like TV makers had Apple in mind when designing the latest batch of smart TVs, especially in the area of device interactivity. It is apparent that at least some of these new capabilities may have been developed to compete with Apple’s possible entry into the TV market in late 2012 or 2013, as suggested by industry chatter. We’ll continue to follow and analyze developments in technology this week at CES.

On December 26, Sony announced the end of S-LCD, their joint venture with Samsung, which entails Gen 7 and 8 TFT LCD fabs. The joint venture, which started in 2004 and was strengthened through agreements and investments in 2006, 2007 and 2008, was owned 50% (+1 share) by Samsung and 50% (-1 share) by Sony, and was the largest joint venture in TFT LCD industry.

Sony decided to pull back from the joint venture in 2012, and sell its share to Samsung, making S-LCD a wholly-owned subsidiary of Samsung, who will pay KRW1.08 trillion to Sony. The reason for the closure, as Sony revealed, is that “LCD panel and TV market conditions have now changed. In order to respond to such challenging conditions and to strengthen their respective market competitiveness, the two companies have agreed to shift to a new LCD panel business alliance.”

At the same time, the companies signed a new agreement for supply and purchase of LCD panels. What are the implications of this change for Sony and Samsung?

• Sony’s panel sources will change, but probably in 2013 rather than 2012. Sony needs a stable and consistent supply of quality LCD TV panels, and we believe Samsung will supply more than half of Sony’s LCD TV panels. Sony’s other suppliers are AUO, Chimei Innolux, and LG Display (according to our analysis), but Sony does not seem to be increasing purchases from others in 2012. In the longer term, Sony will have the freedom to source TV panels from all suppliers.
• With more panel sourcing flexibility, Sony can reduce the use of Samsung panels, and focus on differentiating its LCD TV products.
• Sony is changing its business model, shifting more to BMS (backlight module system). Sony plans to purchase open cells from panel vendors and do the final TV set assembly at both OEM partners and in-house TV assembly lines. Thus, Sony will buy more open cells and fewer finished LCD modules.
• Sony might adjust their 2012 LCD TV shipment plan. The original plan was 22M, but it will likely be lowered to 20M and more focused on higher-end models. Sony is also shifting its promotional activities to China and other Asian markets, and to Latin America.
• Samsung LCD will have more flexibility in their fab product mix. As we have analyzed, without Gen 6 lines, Samsung is limited in its mix of IT and TV panel production. With the joint venture closed, Samsung will have more flexibility in how it allocates its Gen 7 and 8 fabs. This may help Samsung optimize its fabs for profitability.
• Samsung’s TV business continues to be the largest TV customer for Samsung LCD. And with no obligation to Sony, it is possible that the Samsung group will move to in-house LCD panel – LCD TV business.
• It’s also possible that the Samsung group will have more freedom to implement its AMOLED strategy, including the integration of SMD (Samsung Mobile Display) and the transformation of the Gen 8 fab from TFT LCD to AMOLED. Thus, the new Samsung could further integrate its LCD panel, AMOLED, and finished good production.

As the competition between OLED and LCD technologies heats up, news over the past week indicates that there will be consolidation in other display technologies. One of the technologies, MEMS, is being consolidated just as the first commercial product is coming to market. Another display technology, FED, does not have as bright of a future.

The idea of using Micro Electro-Mechanical Systems (MEMS) in a direct-view display originated at MIT in the 1990s. It became the basis for a company called Iridigm, which was acquired by Qualcomm in 2004. Since then, Qualcomm has been investing in the technology, including building a pilot fab and a high-volume fab in Taiwan that will begin full production in 2012. Last month, Qualcomm announced that Korean bookseller Kyobo will sell e-readers that include Qualcomm’s mirasol display technology.

Qualcomm’s mirasol technology utilizes MEMS to control structures that enable reflective cavities of varying depth inside a display. When external light reaches the display, the depth of each cavity determines the wavelength (and color) of light reflected. With each cavity representing a pixel, a reflective color display can be made.

Other companies have developed MEMS displays that use the structures as shutters to control the light from LEDs. One of these companies, UniPixel, has moved away from displays in favor of optical film. The other is Pixtronix, which also has roots in MIT. Pixtronix has developed its own prototype displays, and has been working with Hitachi, Samsung, and CMI to bring its technology to mass production.

Qualcomm has not stated officially that it has acquired Pixtronix, so we can only speculate about its plans. One possibility is that Qualcomm, which relies on licensing for much of its revenues, plans to license the Pixtronix IP. Another is that they could use some of the Pixtronix technology in their mirasol displays, potentially to integrate lighting. Yet another possibility is that Qualcomm could have plans to produce Pixtronix displays in their own fabs.

Whatever the outcome, it is clear from Qualcomm’s production investments, the commercial availability of its products, and its purchase of Pixtronix that it sees MEMS displays as a promising technology. It is interesting that the other successful example of MEMS in displays, microdisplays, was also controlled by one company, Texas Instruments.

The outlook for FED technology is not as positive, however. Field Emission Display (FED) is based on high-voltage vacuum technology that originated in the 1970s at SRI and later at the French research institute LETI. The technology can be described as a CRT in flat panel form, in that it fires electrons at a phosphor screen to produce colors. Instead of a single gun that is scanned across the phosphors, FEDs have micro-emitters in each pixel. FED developers have faced two key challenges: how to keep the emitters from destroying themselves, given the high voltages involved, and how to hold together a thin display under the conditions of a high vacuum.

In the 1990s, there were several different companies pursuing the technology, all of which exited the business, leaving Candescent Technologies, which partnered with Sony. After Candescent declared bankruptcy, Sony acquired the rights to the technology, which it sold to AUO in January 2010. AUO built a new team to develop the technology, but after nearly two years of work, and in the face of financial difficulties, AUO apparently decided to focus on other technologies, such as oxide TFT for LCD and OLED. This would seem to be the end of the road for FED, as there are no other display manufacturers seriously pursuing the technology, at least not the type that uses micro emitters.

That said, FPD International is still the largest FPD show in the world, and for most the most part, the show has been quite crowded. Many people have been taking pictures of innovative demonstrations, such as AUO’s 32” full HD AMOLED TV panel with oxide TFT backplane, Samsung’s ultra-slim bezel LCD TV panel, Asahi’s Gen 8 0.5 mm glass substrate made using float processes, LG Display’s low-power 47” LCD TV panel, Toshiba’s 498 ppi mobile panel, and a glasses-free 3D panel from Chimei Innolux.

After spending the day walking around the show and talking with industry people, I found four categories that have emerged as hot topics: 3D, high resolution, in-cell touch, and transparent LCDs.

3D

• AUO: 46” and 55” 3D LCD TVs and 65” 240 Hz 3D for commercial usage; AUO demonstrated both scanning and pattern retarder technologies
• Chimei Innolux: 3D/2D switchable barrier glasses-free LCD
• Toshiba: 3.0” wide-QXGA glasses-free field sequential 3D panel with OCB technology
• Samsung: Full line-up of 3D LCD TVs dubbed “Smart 3D TV,” including 46”, 55”, and 75”
• Hitachi: LCL (liquid crystal lens) glasses-free IPS 3D panel
• LG Display: Full line of FPR 3D TV panels and a high resolution AH-IPS mobile panel
• Toshiba: Integrated imaging 3D display with nine parallax images projected through a lenticular sheet

High Resolution

• Sharp: 85” 8K×4K LCD TV showing NHK content
• Hitachi: Series of high density medical displays
• AUO: 4.3” 960 × 540 qHD AMOLED (257 ppi) and 4.46” 1280 × 720 AHVA panel (330 ppi)
• Toshiba: 6.1” 2560 × 1600 (498 ppi), targeted at tablet PCs, smart phones, and other high pixel density displays, including 292, 310, 317, and 403 ppi
• Philips: 4K×2K (3840 × 2160) panel, showing glasses-free 3D with 15 viewing points

In-Cell Touch

• Chimei Innolux: IPS LCD with in-cell touch sensor, supporting multi-touch (10 points)
• AUO: 27” full HD panel with integrated OGS (one glass solution) supporting multi-touch (10 points), and targeting all-in-one PCs and monitors. AUO claims this is the largest OGS touch panel.

Transparent LCDs

• LG Display: 26” C-Thru (see-through) LCD panel
• AUO: 65” transparent LCD, installed in a slot machine showing a video overlay, and 19” “hollow display” on a Pachinko slot game machine
• Samsung: 22” transparent portable LCD TV with stylish design

Figure 1: AUO’s 65” Transparent LCD Installed on a Vending Machine

In addition to these demonstrations, there were other interesting products and technologies on display, such as e-paper, MEMS, flexible AMOLED, and narrow-bezel mobile phone panels. Many component makers, such as glass substrate manufacturers, optical film producers, photomask producers, and equipment companies, also exhibited.

These technologies and products provide clues for short- and long-term development of the FPD industry. We will be providing more details, in several upcoming reports.

Brazil is moving into technology manufacturing through government policies such as tax breaks, subsidies, and if necessary, direct financial support, similar to the approach China has taken.

The convenient location of Brazil relative to the United States, the growing South American markets, and plentiful labor resources attracted Foxconn to Brazil, but the Brazilian government policies, including import duties, are the strongest reason. The Brazilian government is providing the following incentives:

• Tax reductions/exemptions: In May, Brazilian president Dilma Rousseff signed a provisional exemption for the social security taxes (9.25%) and industrial production tax (15%-3%).
• Special industrial zone, with infrastructure such as logistics centers, warehouses, and building for assembly lines
• Export priority
• Local investors supported by the government
• Special benefits in logistics
• Financial support (syndicated loans or low interest rate funding) from Brazilian governmental bank consortiums (which could be most important for investors)

The expected locations for the facilities Foxconn include Manaus (mobile phone spare parts and assembly), Jundiai (iPad, iPhone, monitors, TVs, and desktop PCs), and an undecided third location for touch panel production.

The plan for Brazil government is to bring big projects like Foxconn to stimulate employment, to increase the abilities of the workforce, and to add to local technology business. Foxconn is currently the biggest company to work with the Brazilian government, but other companies are in discussions as well.Based on the experience in China, assembly lines are just the first step. The Brazilian government is targeting big investments like semiconductors, TFT LCD, and touch panel production. GDP and exports will be increased through these investments, and as the business grows, the increased tax receipts may be sufficient to cover the cost of the subsidies.

However, such investments are big enough for investors to need to leverage risk, and given the difficult financial situation that panel makers face, financial backing in Brazil might be the most important factor for establishing TFT LCD or touch panel fabs there. Brazil might also learn from China about how to finance such projects, directly and indirectly. Eventually, we may see a government joint venture with panel makers to build LCD fabs in Brazil, like in China. It would not be a surprise to see an advanced generation TFT LCD fab in Brazil someday supplying panels needed for the Americas.