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E Ink and AUO ink patent cross-licensing agreements

TAIPEI--Taiwan-based E Ink Holdings Inc., the world's largest electronics paper display supplier, and its subsidiary Hydis Technologies Co. Ltd. have signed cross-licensing agreements on patents with flat panel maker AU Optronics Corp.

Under the agreements inked Friday, the partners will work together on development of liquid crystal display production technology, including wide viewing angle fringe field switching (FFS) technology.

E Ink Chairman Scott Liu said Hydis Technologies, which is based in South Korea, only has 3.5 generation production facilities with a limited capacity, but through the patent licensing agreements, the unit is expected to generate more profits.

In addition, the licensing agreements are expected to promote the use of FFS technology in the flat panel industry.

Market analysts said AUO, the second largest flat panel maker in Taiwan, has secured orders from Apple Inc. for screen supply to a smaller version of the iPad, which is expected to be launched later this year.

They said the FFS technology is one of the features of the smaller version of the iPad which the market has called the iPad mini.

Earlier this year, E Ink signed similar agreements with Sharp Corp. of Japan in which the Japanese electronics giant is allowed to use Hydis Technologies' FFS technology.

The agreements with Sharp and AUO will continue for 10 years. However, E Ink declined to disclose any financial terms of the agreements.

In addition to Sharp and AUO, South Korea's LG Display Co. and Taiwan's Chunghwa Picture Tubes Ltd. have been granted the particular technology by Hydis.

Meanwhile, Liu said he expects sales of the global e-paper display market will grow in 2012 from 2011, when the industry encountered inventory adjustments.

Liu said although inventory adjustments continued into the first half of this year, the peak-season effects in the second half have been alleviating the inventory impact, adding sales growth will become obvious in the fourth quarter.

Last year, E Ink accounted for more than a 90-percent share of the market, according to a market estimate.

Analysts said E Ink has been benefiting from the launch of the new Kindle Paperwhite model by Amazon, which is one of the major buyers of the Taiwanese e-paper display supplier.

They said on the back of Amazon's orders to boost its profit margin, E Ink is expected to swing to profit in the third quarter of this year.

In the first half of this year, E Ink incurred NT$1.73 billion (US$58.84 million) in net loss or NT$1.49 in loss per share, compared with NT$2.92 billion in net profit or NT$2.78 in earnings per share recorded over the same period of last year.

Shares of E Ink fell 5.63 percent to close at NT$30.20 with 15.74 million shares changing hands Friday, while the index of the over-the-counter market, where the stock is traded, ended down 0.35 Percent at 103.96 points.

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