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October 24, 2000
Sony Takes Minority Position in Candescent; Companies Enter Into Manufacturing License Agreement
TOKYO, Japan and SAN JOSE, Calif., October 24th, 2000 -- Sony Corporation and Candescent Technologies Corporation, a leading developer of next-generation flat panel displays (FPD), today announced an agreement to extend their existing partnership. In October 1998, the two companies announced their initial agreement regarding the joint development of high voltage Field Emission Display (FED) technology for next generation thin, flat-panel displays. The new agreement extends their joint technology development partnership until December 2001 under which the two companies will co-fund these activities.
The agreement announced today, provides for an equity investment in Candescent by Sony and certain upfront license related fees in connection with a license granted to Sony to develop and manufacture displays based upon Candescent's FED technology. The expanded development partnership will support Candescent as it begins the process of transitioning its FED technology from development to manufacturing. The completion of the transaction is subject to approval of the equity investment by Candescent shareholders and various other conditions.
The high voltage FED technology being developed by Candescent and Sony can be used to create full color displays in which each pixel on a screen produces light separately by a corresponding electrical discharge array (micro-electron gun). Each electrical discharge array employs semiconductor technology to individually activate a single pixel by focusing a beam of electrons from each of the cathode emitters on the individual phosphor elements. Because this technology employs the same light generating principle used in a conventional cathode ray tube (CRT), it produces a similar level of brightness, viewing angle, and response time. In addition, because there is no need for an electron gun mechanism or a deflection plate, FED displays can be made thin and lightweight, similar to LCD displays. High voltage FED displays employ phosphor materials similar to those used for current CRT screens, which allow the displays to achieve high levels of brightness and reduced power consumption.
"High-voltage FED technology is able to achieve a level of performance comparable to CRTs in terms of brightness, viewing angle, and response time," said Tadakatsu Hasebe, corporate executive vice president of Sony Corporation. "FED display devices could eventually replace the conventional CRT. Candescent is a leading developer of high-voltage FED technology. Together with Candescent, we will continue our efforts to work toward bringing FED technology to commercialization."
"Sony is a premier provider of consumer and commercial electronics, and its commitment to Candescent opens the door to significant global opportunities for our companies as we begin to turn our focus towards product commercialization," said David L. White, President and Chief Executive Officer of Candescent Technologies. "The market for high quality flat panel displays is expected to expand at an astounding rate with the emergence and growth of new display applications in the areas of digital media, information appliances and wireless communications. The combination of Sony's extensive technical and business experience in the display market and Candescent's breakthrough display technology strategically positions our companies for success."
Flat panel displays are recognized as one of the electronics industry's most important technologies and one of its largest emerging markets. Industry analysts at Display Search estimate that the FPD market will grow exponentially over the next five years to approximately $70 billion by 2005. Upon the completion of this transaction, Sony will become the first licensee of Candescent's FED technology, and the agreement paves the way for Candescent's entry into the market as the first U.S.-based manufacturer of a direct view emissive flat panel display.