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U.S. fights back on thin displays

A well-funded Silicon Valley start-up begins building a facility to produce "ThinCRT" computer displays.

U.S. manufacturers are fighting back with bold yet risky technology as they try to get a foothold in the thin "flat-panel" display industry.

Asian manufacturers in Japan and South Korea dominate the market for flat-panel technology, which is based on liquid crystal displays (LCDs), the technology used in all notebook PCs and increasingly as stand-alone monitors.

But Candescent Technologies, a Silicon Valley start-up, is trying to shake things up. The company has received financial backing from Hewlett-Packard, Compaq, Sony, and other heavy hitters, and has begun building a manufacturing facility to produce screens that will have the brightness of traditional computer monitors but the thinness of LCD screens.

If the company's idea unfolds as planned, the "ThinCRT" technology from Candescent will mean people can buy cheaper, less power-hungry computers with screens that have the best aspects of both of today's prevailing display technologies--traditional cathode ray tubes (CRTs) used in most desktop computers and LCDs used in portables.

Candescent plans eventually to have enough capacity to supply a million or more 14.1-inch screens, which ranks the Candescent plant up there with the state-of-the-art Korean or Japanese display plants, according to Dave Mentley of the display research company Stanford Resources. "This is clearly the biggest display panel factory ever to be built in the U.S.," Mentley said.

Additionally, Motorola has a hush-hush project in Tempe, Arizona, that already boasts a big factory with $100 million or $200 million worth of equipment inside for making displays similar to Candescent, according to sources.

ThinCRTs have the brightness and rich colors of CRTs, said Candescent president Harry Marshall, but they're a third-of-an-inch thick, so they would drastically cut down on the bulk of current desktop monitors. They also use about a tenth of the power of conventional CRTs, said Bob Ritter, senior vice president for marketing at Candescent.

Candescent began construction about three weeks ago on a new 340,000-square-foot, $465 million manufacturing facility, or "fab," to build the new displays, he said.

Candescent also initially will sell small screens to companies building handheld computers, dashboard navigation computers, and test and measurement equipment, he said. Once the company is making big screens, it plans to sell to companies making portable computers or desktop monitors.

How good is the technology?
Like CRTs, ThinCRTs generate light by bombarding phosphors with electrons. ThinCRTs, though, get their electrons from tiny "field emitters" very close to the phosphors instead of from an electron gun more than a foot away like traditional screens.

The main competitor to ThinCRT is field emitter display (FED) technology. Under development at various labs for the last 20 years, FEDs have a number of technical obstacles to overcome, cautioned Mentely.

"The potential is there for CRT-like performance," Mentley said, but the companies working on FEDs have had only limited success so far.

One of Candescent's competitors is PixTech, which thus far is selling only small, monochrome FEDs, Mentley said.

Success for Candescent will hinge on "their ability to execute a low-cost, high-volume manufacturing process," Mentley said.

U.S. location is a bold move
Building a fab in the U.S. is an "extremely bold" move, Mentley said. Currently, the biggest flat-panel display factories are in Japan or South Korea, countries with expertise in high-volume, precision manufacturing.

Candescent got its start with help from Hewlett-Packard, which owns a non-majority stake in Candescent. In addition, computer monitor giant Sony contributed $50 million in a deal two weeks ago to help bring its expertise to Candescent's operation, Marshall said. Sony will eventually get a license to manufacture ThinCRTs and has an option to manufacture at Candescent's facility.

Other investors in Candescent include Compaq Computer, Bankers Trust, J.P. Morgan, and Citicorp. The company also won $11 million from the San Jose City Council, most of that a $10 million loan incentive against property taxes, Marshall said.

According to Candescent, there are seven flat-panel display manufacturing plants in the U.S., but they all are based on pieces of glass much smaller than that Candescent will use. All 26 plants that build with the largest size of glass are in Asia, said Candescent spokesman Stewart Hough.

Candescent, founded in 1991, currently has 300 employees but expects to employ about 800 when the factory is fully operational.

"This new facility is one of the most advanced flat-panel display manufacturing facilities in the world, and the first of this caliber outside of Asia, marking the return of high-volume display manufacturing to the U.S.," Candescent executives said.

Having a plant in the U.S. will keep Candescent closer to its developers, customers, and suppliers.