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Display companies partner on development

Cambridge Display Technology and Opsys are combining their display efforts to further push the development of next-generation displays.

Cambridge Display Technology and Opsys are combining their display efforts to further push the development of next-generation displays.

CDT announced Monday that it would acquire Oxford, England-based Opsys for its work in organic light emitting diode (OLED) technology. Financial terms weren't disclosed, but the deal includes an immediate cash payment and deferred payment in CDT shares to Opsys, according to CDT. The deal did not include Opsys' U.S. business. CDT will receive ownership of Opsys' dendrimer OLED technology.

Both companies are privately held.

OLED is expected to consume less power and be thinner than liquid crystal displays (LCDs), which dominate the lucrative multibillion-dollar flat-panel monitor market. The technology does not require screens to have a backlight.

But analysts don't expect OLED to unseat LCD anytime soon because, as with any emerging technologies, it takes time to streamline production and boost yields for high efficiencies and volumes. OLED displays are currently used in smaller devices, such as cell phones and electric shavers.

The market for OLEDs is projected to grow from $85 million this year to $3 billion by 2007, according to a report from research group DisplaySearch.

CDT promotes polymer-based OLED technology, which is different from the more widely used small molecule-based OLED technology developed by Eastman Kodak. The main difference between the two is in the method of production. Production of small molecule OLED displays is a more complex process than the polymer OLED displays.

Incorporating Opsys' dendrimer technology to CDT's polymer OLED technology could lead to more efficient and brighter displays, but the dividends of the deal may take some time to pay out. A dendrimer is a polymer, which is a large molecule comprised of many smaller ones linked together.

"The Opsys acquisition is not a quick shot in an arm," said Kimberly Allen, an analyst with research firm iSuppli/Stanford Resources. "It's a strategic move for CDT and further developments in polymer OLED technology."

CDT does not manufacture displays, but instead licenses its technology to manufacturers.

"This agreement with Opsys is in line with our strategy of consolidating (intellecual property) in the OLED space in order to enhance the attractiveness of our technology offering to existing and prospective licensees," CDT CEO David Fyfe said in a statement.