Royal Philips Electronics and Toppoly Optoelectronics Corporation of Taiwan have announced they have signed a binding letter of intent to join forces in mobile displays by merging Philips’ Mobile Display Systems (MDS) business unit with Toppoly to create a leader in mobile display technology.
Toppoly will swap shares for Philips’ mobile display unit, which will enable it to more than double its output of small and medium-sized displays
The merger will give a boost to Toppoly in vying for the top place in the world’s small and medium-sized display panels in the long run, after the two companies’ customers, technologies and products are integrated, Toppoly chairman Ray Chen said at a joint press conference in Taipei.
The new entity, renamed TPO, will boost monthly output to around 10 million units of displays sized under 10 inches, from Toppoly’s current 3.8 million units, Chen said.
Toppoly, established in 1999, makes thin-film-crystal (TFT) liquid-crystal-display (LCD) screens used in a wide range of products, including mobile phones; pocket PCs, and displays in cars and notebook computers.
With a combined 11 percent market share, TPO will overtake Japan’s Sanyo Epson Imaging Devices Corp as the world’s No.3 supplier of the world’s small and medium-sized displays, according to statistics provided by market researcher DisplaySearch.
Samsung SDI Co of South Korea occupies the top place in the world’s small and medium display market, while Wintek Corp of Taiwan takes the No.2 spot, according to DisplaySearch.
TPO aims to be one of the world’s leading solution providers in the mobile display industry by combining Philips’ and Toppoly’s respective strengths and resources. The deal will result in an innovative and highly competitive entity in mobile displays, offering an extensive product and technology portfolio.
Toppoly has state-of-the-art production facilities with substantial production capacity in Taiwan and China for advanced mobile display technologies, such as low temperature polysilicon (LTPS) and active matrix organic light emitting diodes (AMOLED). The company, which successfully pioneered LTPS, has a high performance product portfolio, fast time to market and an extensive customer base of diversified applications.
Philips will contribute its substantial intellectual property portfolio and its advanced technology in cooperation with Philips Research, as well as its long-term relationships with a wide, global customer base and a successful track record in product quality.
Through this merger, we will create a global industry leader that is innovative and provides sustainable competitive advantages for the long term. By teaming up with MDS, we are strengthening our capabilities to providing the best service to our customers worldwide, said Ray Chen, the President and CEO of Compal Electronics Inc. and Chairman of Toppoly Optoelectronics Corp.
The deal sounds okay. I think Toppoly is aiming for Philips’ customer base, which will help the company deepen its presence in the small-and-medium screen panel market, said Wang Wanli an analyst with Credit Suisse First Boston’s local branch.
Customer base is crucial for small-and-medium display makers as the screens are mostly custom-made and qualification procedures take at least six months, Wang said.
Toppoly expects to wrap up the acquisition in the first half of next year at the latest, after the two companies obtain the approval of shareholders and securities regulators, Chen said.
The transaction will be conditional upon regulatory approvals, and is expected to be completed in the first half of 2006.