By Chris Chinnock
FOSTER CITY, Calif. - Leaders of Photonics Systems Inc. of Northwood, Ohio - the only U.S.-owned manufacturer of plasma display panels - are merging their company with QFTV of Foster City, Calif. The new company, to be called QFTV Photonics Systems, will focus on supplying plasma displays for military, industrial, and commercial applications.
The companies are able to merge because Photonics Systems officials settled outstanding litigation that has tied up their patent portfolio for more than a year.
Ironically, this pending litigation may have shielded Photonics from Asian buyers. Matsushita Electric Industrial Co. Ltd. of Osaka, Japan, bought the other major U.S. plasma display manufacturer, Plasmaco of Highland, N.Y., in January 1996.
Officials of Photonics and QFTV say their respective expertise in technology and marketing makes their merger a good fit. "Photonics Systems`s strength lies in the manufacture of plasma display panels and the intellectual property surrounding that, while QFTV`s strength is in marketing and distribution," says QFTV chairman Peter Marcus.
QFTV officials say they have already lined up 35 integrator/ dealers and about 50 retail dealers.
Photonics engineers offer a 30-inch XGA plasma panel, and are working on a 30-inch SXGA model, primarily for military command, control, and surveillance applications.
QFTV designers have been using 42-inch plasma panels from Fujitsu of Kawasaki, Japan, to provide plasma displays for commercial applications such as trade shows and point of purchase. They also supply displays for corporate uses such as executive offices, small presentation rooms, and video conferencing. The new company will continue to provide displays to all of these markets.
The combined company will be able to fund more technology, increase manufacturing, and bring down costs, officials say. In fact, they are already laying plans to build a new medium-volume manufacturing line.
Fujitsu engineers have been delivering plasma displays for several years, and are considered to be the market leaders. But several other manufacturers are now beginning to offer products. For example, Mitsubishi officials plan to ship a 40-inch VGA monitor in April and a SVGA monitor by this fall.
Matsushita officials, meanwhile, sell a 42-inch 16:9-aspect-ratio plasma display in Japan, while Pioneer officials sell a 40-inch 4:3-aspect-ratio VGA display worldwide, and 50-inch 16:9-aspect-ratio plasma displays in Japan only. NEC should enter production soon with a 42-inch display, and Thomson Components & Tubes has a 24-inch SXGA plasma display with a 5:4 aspect ratio.
All told, experts say Asian producers have committed $6 billion to plasma display development, including building several new manufacturing plants. What all these vendors are eyeing is a consumer TV market that could buy millions of plasma displays per year. But getting the price down will be key.
Philips officials are in the midst of ramping up distribution throughout the U.S. to sell high-definition plasma display TVs, which incorporate a panel from Fujitsu and will sell for $15,000.
To help bring prices down, manufacturers and system integrators are turning to alternative markets. QFTV and Photonics leaders have learned some important lessons from their experience so far. For one, plasma displays are fragile, so a ruggedization effort quite similar to that undertaken with LCDs is needed to make them suitable for many applications.
"By applying Photonics military ruggedization technology to the 42-inch Fujitsu panel, we can now offer a product that can withstand the rigors submarines or the audio/visual stage rental businesses," says QFTV`s Marcus.
Under the terms of the merger, all manufacturing operations like fabrication and assembly will consolidate in the Northwood facility. All sales and marketing operations will move to Foster City.
