Local Players Building Taiwan Into Global E-paper Production Center

Electronic-paper (e-paper) technology has continued to undergo progress since its birth in the late 1990s, after which e-paper makers have been engaged in R&D, sampling, small-batch production to finally realize mass production in 2008.

Basically e-paper or electronic ink display is a technology designed to mimic the appearance of ordinary ink on paper. Unlike a conventional flat panel display using backlight to illuminate pixels, e-paper reflects light like ordinary paper and can hold text and images indefinitely without drawing electricity, while allowing images to be changed later. E-paper is considered more comfortable to read than conventional displays, due to its stable image that does not need to be refreshed constantly, the wider viewing angle, and reflection of ambient light rather than emitting its own light.

To gain advantages via product differentiation has driven players in the still nascent e-paper sector to utilize in-house developed techniques to create applications with different features, including multi-color, large-sizes, flexibility, touch-control etc. In addition, increasingly more companies have built or will develop various applications using e-paper, such as intelligent cards, electronic tags, digital clocks, handset push-button decorations, signboards, and the increasingly popular e-book readers.

Taiwan is advantageously poised amid the global e-paper sector, mainly due to having major IT players involved: Prime View International Corp. (PVI) has supplied for years e-paper display modules, while even AU Optronics Corp. (AUO), the largest thin film transistor-liquid crystal display (TFT-LCD) panel maker in Taiwan, has announced plans to enter the relatively-new sector, helping to build considerable anticipation among global makers and consumers.

Upstaged

Industry sources say that companies trying to commercialize e-paper products as early as in 2000 were upstaged sort to speak-the rapidly rising TFT-LCD and double-emission active matrix organic light-emitting diode (AMOLED) technologies captured most of the attention-to deter e-paper operators from making more investments in development. Such fortuitous timing did PVI a big favor by turning the firm into the sole e-paper supplier, whose advantageous position was further pushed ahead when the Amazon Kindle wireless reader (e-book reader) won excellent response upon its market launch last year.

Taiwan's edge in the e-paper business is also sharpened by the local companies' realization that technological acquisition is the shortest way to the fast track. To date, PVI has announced its acquisition of E-Ink for US$215 million, with AUO acquiring a 30% stake in SiPix, and other firms in Taiwan planning to partner with Bridgestone and Fujitsu, all of which are major e-paper technology suppliers. Such aggressive strategy will help Taiwan to further breed a world-class e-paper production base backed by integrated supply chain and cost competitiveness.

Huge Potential

T.W. Po, an industry analyst for Topology Research Institute (TRi), the largest private technology market researcher in Taiwan, says that most consumers have a narrow view of e-paper applications, being only familiar with e-book or e-reader, when in fact many more products have been created. TRi's data show that the e-paper market was only US$22 million in 2007 and is expected to surge to US$400 million by 2010, driven mainly by e-books, information displays, signboards etc. The value is expected to rise to US$800 million by 2012 to allow ample room for newcomers.

Quoting statistics compiled by Andrew Tribute, TRi says that currently e-book contents are sold to about 400,000 e-books per month, with such volume expected to quickly equal that of paper books by 2010. The penetration of digital data is estimated to reach 65% by 2020, when all kinds of e-readers will be launched, helping to build synergy amid the promising digital-publication sector.

The analyst Po says that prices of e-books are still relatively high due to limited suppliers, capacity and yield rate, which together incur high BOM (bill of material) cost of display modules. The BOM of a 6-inch e-reader sold in the first half of 2009, for example, was about US$180, which is expected to gradually decline to about US$150 by the year-end with more newcomers joining production, while display-module-plus-controller-ICs will account for less than 30% of overall reader cost compared to over-30% early this year.

Rising Competitiveness

The e-book market will see increasing competitiveness, Po says, as more and more newcomers join the market, over 70% of which is currently shared by Amazon and Sony. The 2009 shipments of e-books will reach an estimated three million units, the analyst says, and the volume is expected to exceed 10 million by 2011 with more IT and telecom companies entering the arena.

According to Po, lightweight, thin, easy-to-operate, affordable e-readers are gaining higher popularity, with Taiwan owning an integrated supply chain.

Besides PVI, AUO, SiPix and E-Ink, players in Japan and South Korea as Sharp, Samsung, LG Display etc. are also quickly catching up, especially in the flexible-display technology. Bridgestone of Japan plans to soon partner with Delta Electronics Inc. of Taiwan to develop and produce e-paper applications; while Fujitsu plans to set up a front-section production line and R&D center in Taiwan for cholesterol-LCD e-paper film. Such developments show the writing is on the wall that Taiwan is gaining increasingly important status in the global e-paper business.

However, Po warns, Taiwanese companies are obliged to retain key e-paper technologies as well as invest more resources in new technology development to further consolidate the island's lead, a critical strategy to keep at bay strong rivals in Japan and South Korea. In addition, the analyst stresses, it is necessary to refine color and touch-control integrated e-paper products, as well as develop more e-paper applications to build a protective wall against competition from LCD and organic light-emit diode (OLED) counterparts.

Major E-Reader Makers and Products
Power-saving Mode	Technology	Company	Product & Features
EP (electro- phoresis)	E Ink (Microcapsule)	Amazon (U.S.)	Kindle 1 /Kindle 2 /Kindle DX (6-/9-inch, monochrome, thickness 9mm)
Sony (Japan)	PRS-600 /PRS-300 (6-/5-inch, 800x600 resolution, grayscale)
Iriver (Japan)	Libre (6-inch, 800x600 resolution , no wireless, USB/SD card compatible)
Hanvon (China)	N518 (5-inch, 190g, handwriting/touch, 800x600 resolution)
iRex (France)	iRex (8.1-inch, touch/handwriting, wireless Internet, Linux OS etc.)
Elonex (U.K.)	Elonex ebook (6-inch, 4GB, 9mm-thin)
Brother (Japan)	SV-100B (9.7-inch, 1200x825 resolution, battery life 83 hours)
SiPix (Microcup)	AUO (Taiwan)	6-inch, 16-bit grayscale, 800x600 resolution, touch control
Bridgestone (QR-LPD)	Delta Electronics (Taiwan)	A4 size, change-page 0.8 sec., color.
Cholestero -LCD	CH-LCD (Fujitsu)	Fujitsu (Japan)	8-inch, color, touch control, standby time 40 hours, Windows CE 5.0 OS.
Source: IEK of ITRI, August 2009.