THE FRONT LINE: FEBRUARY 12, 2007
The Perils of SED
A recent court decision forced Toshiba and Canon to break up their partnership in SED Inc. and dealt a major setback to the technology. So where does Canon go from here?
The original 36-inch 720p prototype screen from SED Inc.
“It” was touted as the next big thing in displays. “It” would produce rich blacks and dead-on accurate colors. “It” would also use less power than plasma and LCD, have a thinner profile, and compete head-to-head for consumer HDTV dollars, starting in 2008.
“It” of course, is the Surface-conduction Electron-emitter Display, or SED, and it’s been under development by Canon for twenty years. Using a variation of Field Emission Display (FED) science, the SED debuted in 2005 in a 36-inch screen size with 1280x720 resolution.
At CEATEC 2006, new models with 55-inch screens and 1920x1080 resolution were demonstrated. It was only logical to assume that those same screens would make an appearance at CES 2007, and many of us in the trade and consumer press could hardly stand the wait.
That is, until a judge ruled that Canon and Toshiba couldn’t show the new SEDs. Or, for that matter, any SED display for the consumer marketplace. The catch?
Some of the technology incorporated in the SED was licensed by a company known as Nano-Proprietary, Inc. of Austin, Texas. Under the terms of the license, Canon or any of its subsidiary companies could use the FED intellectual property and patents to develop a commercial television product.
But Snidely Whiplash showed up to ruin the day. As reported by Ken Werner in the January 16 issue of Display Daily, Nano-Proprietary brought legal action against Canon and Toshiba for forming a joint venture (SED Inc.) to manufacture SED HDTVs and monitors.
To quote a N-P press release from January 12: “Restructuring of Canon’s ownership position does not resolve the pending litigation which goes to trial in a few weeks,” said Nano-Proprietary CEO Tom Bijou. “We have terminated Canon’s license as a result of breach of contract. Moreover, our complaint against Canon includes other counts, including fraud unrelated to the ownership of SED. We are, however, willing to enter into a new license agreement with Canon on reasonable terms.”
Note the last sentence. Apparently the three parties were unable to come to those reasonable terms, so Canon opted to buy out Toshiba’s share of SED Inc. and go it alone with panel manufacturing. Toshiba will proceed for now with plans to OEM the product and bring a Toshiba-branded version to the Japanese market later this year.
This corporate re-shuffling and legal action comes on top of other delays created by lower-than-anticipated manufacturing yields. Indeed, no SEDs were seen at this year’s Society for Information Display (SID) show, which is a good way to start ugly, fast-spreading rumors about a given technology’s diminishing chances of survival.
On the face of it, things don’t look good for Canon and the SED right now. Canon now finds itself in a business (flat panel manufacturing) where it doesn’t have prior experience, and will be competing against the one-two punch of plasma and LCD, both of which are mature, mass-marketed HDTV products with aggressive channel pricing and distribution.
For Canon to compete on that playing field, tens of thousands of SED HDTVs would have to be cranked out each month. SRPs (right now) could be no higher than $4,000, based on competing 1080p 52-inch and 57-inch plasma and LCD products.
Canon must also be prepared to see retail prices drop 20 to 25 percent a year, and will have to compete with the illogical wheeling-and-dealing that is characteristic of Chinese and Korean FDP manufacturers — something that is giving Pioneer executives major cases of indigestion.
The SED yield problems could be a major obstacle to getting any volume of finished HDTVs onto shelves worldwide in time for the 2008 Beijing Olympics, a potential sales bonanza that is attracting every LCD, plasma, DLP, and LCOS HDTV manufacturer like moths to the flame.
Snidely Whiplash cackles with glee as he serves up legal papers. The sky is getting darker. Will someone come to the rescue? Tune in next time for another thrilling episode of the Perils of SED…
