LCD technology to be developed

Motorola has inked an agreement with In Focus Systems, Inc. to develop advanced passive-matrix, liquid crystal display (LCD) technology for use in its future portable computers and communication devices. As part of the agreement, Motorola has purchased $22 million, or 20 percent, of In Focus stock.

The venture, not yet named, will begin by developing small, flat-panel screens, 6½ inches or smaller, for portable computing and communication devices and will incorporate In Focus’s proprietary technology, called Active Addressing.

GOING COMMERCIAL AND MANUFACTURING

Eventually, the venture will branch out into other areas. “The joint venture has two charters: to manufacture LCDs and to commercialize Active Addressing technology,” says Paul Gulick, VP of technology and co-founder of In Focus. The company is in the business today of manufacturing both active and passive matrix products for the color LCD projection market, and claims $50 million in sales for 1991.

Active matrix LCDs are so named because every pixel on the screen is driven by its own individual transistor. Instead of using individual transistors, a passive matrix display lights up its pixels by sending electrical charges through a crosshatch of horizontal and vertical wires to the correct location on the screen. The screens are often slow and lack definition.

Overcoming limitations. Active matrix panels are admittedly superior to passive matrix in contrast, resolution and reaction time. However, manufacturing costs for the screens are prohibitively high because to date they still have a very low yield rate — only about 50 percent work well enough to make it off the assembly line.

In addition, the U.S. Department of Commerce decided last year that selling active matrix displays below manufacturing cost (a common practice for Japanese companies that are trying to build a market) constitutes “dumping,” and imposed a 62.67 percent tariff. The immediate result was to shift manufacturing of notebook computers and other devices that use active matrix displays out of the U.S. So much for using trade policy to protect domestic jobs!

Active Addressing is based on a single, custom-designed display chip that acts as a booster to passive matrix, speeding its performance to nearly that of active matrix by mimicking active matrix circuitry.

As a result, the company says, Active Addressing overcomes many of passive matrix’s inherent shortcomings.

QUALITY AT A FRACTION OF THE COST

“The advantage to passive matrix is that it’s much cheaper, substantially easier to manufacture and has a high yield rate,” says Sharon VanSickle, spokesperson for the joint venture. “With Active Addressing, you get full color, video rates, high contrast and [high] resolution.”

Indeed, the cost of an Active Addressing chip in a passive matrix screen may only add 25 percent to the screen’s cost — cost that’s directly attributable to the custom electronics required. Even that barrier might not last long. Gulick anticipates future generations of Active Addressing may be done in software.

Active Addressing does not achieve the quality of active matrix technology, however. “Minor artifacts from passive matrix manufacturing technology remain,” says Gulick. “For instance, there’s the lack of uniformity from one edge of the screen to another — Active Addressing doesn’t fix these problems. These are manufacturing problems.”

Interest and commitment. Still, since In Focus showed its first prototype circuit board of the system at a symposium in Boston last February, “interest has been very high” from third-party vendors wanting to invest in the technology, says Gulick. Motorola showed the most commitment, he said, and “shared our vision in what this technology could do,” says Gulick. Equally attractive was the company’s strength in the business of embedded chips.

Screen size will not remain an issue. The company will focus on the small screens for the first year, but are starting with the smaller screens because “this is what Motorola wanted to do.”

A staff of several hundred employees will open up shop in Portland, near In Focus’s headquarters in Tualatin, OR, before the end of 1992. For the first year, the staff’s mission will be to design and develop the Active Addressing custom chip.

In Focus says the new chip will be on the market by 1993. A manufacturing facility is also slated to come on line in 1994 with an ambitious production schedule of 50,000 panels in its first year.

BOTH WANT THE HANDHELD MARKET

The investment by Motorola is yet another signal that the company is determined to own more than one piece of the handheld device market. Though the company cannot compete with its archrival Intel as a provider of core microprocessors for personal computers and workstations — Intel’s x86 line clearly has the corner on that market — Motorola is a growing and great success in the market for the manufacture of embedded and/or special purpose microprocessors.

In addition, Motorola is already a partner with the Apple spinoff General Magic, widely known to be producing a personal communications device; it’s also IBM’s partner in the Ardis wireless data network; it’s the world leader in wireless radio modems; and it’s also a world leader in general-purpose digital signal processing chips.

Clearly the company believes personal communications devices, such as handheld or palmtop computers, are a vast potential market, and is making investments to gain access to as much of that market as possible.

Perfect timing for In Focus. This is also an exciting new venture for In Focus, which could increase its business exponentially if Active Addressing screens catch on. LCD projection devices are a very small market compared to the potential of mass-market personal communicators or so-called “personal digital assistants.”

The development effort comes at an excellent time. LCD panels and projectors alone are expected to reap annual sales of $1.25 billion by 1995, according to a recent market study by Rochester, NY-based Hope Reports. But Gulick believes the potential market is much larger than projections.

He says applications for flat panel displays will mushroom to include notebook and handheld computers, communication devices, automotive applications, small handheld TVs and picture phones. Gulick believes the worldwide market for LCDs will reach $14 billion by 1996.

Amy Johns, Denise Caruso