Insight’s Daily Outlook

Every weekday morning, Insight Media’s Steve Sechrist and Ken Werner have a conference call with Jamie Townsend and Alex Hamilton of IM’s financial analysis partner, Townhall Proprietary Research. We screen the news of the display and consumer electronics industries, and we figure out what matters and how to use it. We do this to help in our editorial process and to support Townhall’s analysis on the financial impact of the news. Now, we’re sharing those insights with a wider community.

Our goal is to simply – and very briefly – tell you what we think is interesting or important from today’s headlines. This is your opportunity to see how we look at events each day and how we judge their impact. It is your chance to get an early jump-start on an important event – with a little guidance from the experts at Insight Media.

Welcome to Insight Media’s Daily Outlook.

Ken Werner
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kwerner@insightmedia.info

Toppoly Benefits from Taiwan’s new China Investment Policy

by Steve Sechrist

Steve Sechrist
Projection Industry and
Editorial Expert

December 14, 2005 - In a recent Taiwanese government shift towards relaxing restrictions on companies investing in production on the Chinese mainland, the MAC (Taiwan’s Mainland Affairs Council) agreed to allow Taiwan national firms to buy or invest in non-Chinese based enterprises. While this seems like a minor concession on the part of the government, it has major implications for Toppoly Optoelectronics, who recently purchased the mobile display systems business unit from Royal Philips.

This deal-making policy has implications on several levels. For Toppoly, it gets them a relatively cheap source of Chinese labor for a time, and labor intensive part of their LCD assembly process. For China, it moves the LCD production expertise and technology transfer further upstream towards full “back-end” assembly. By all counts this is a logical and expected direction for the Chinese, but a milestone none-the-less. Finally, and perhaps most significant, the deal with Philips that initially didn’t look as attractive because of MAC ownership restrictions, now in retrospect is a brilliant piece of corporate/government maneuvering by Toppoly. So much so, that it makes one wonder if this policy shift wasn’t in the works well before the Philips/Toppoly deal was struck. This is reminiscent of the famous Clinton/Ted Turner buffalo deal in which several months prior to government sponsored buffalo entitlements, billionaire Turner buys one of the largest ranches in the US and populates it with—yes government subsidized buffalo.

Now here’s an interesting side-note perhaps not lost on Toppoly. Turner has grown his ranch into no less than 14 large buffalo ranches, making him the largest private land owner in the US. It all goes to show that successful deal making leading to significant competitive advantage comes at many levels, both corporate and government, and on the surface looks like genius in being at the right place at just the right time—and that’s no bull, err…, buffalo.

One other story we picked up was on the Amimon announcement of wireless transmission of uncompressed HDTV at 1.5Gb per second. Hollywood likes this approach as uncompressed streaming data is much harder to capture and replicate (distribute royalty free on the web)—given the shier volume and data rate of the stream.

Manufacturers like it because it eliminates the need to pay for expensive codec’s and royalty payments for MPEG-2, and 4 compression. Keep in mind Amimon is not giving away the technology, but if they are smart about it, everyone can save.

The company positions the solution as a step towards universal connectivity “making the wireless living room a reality”. That may be so, but there are still many unanswered questions and the product is not due to ship until mid-06. We’ll have to look for this one at CES and give an update on what we see.

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Insight Media (www.insightmedia.info) provides a full array of market research, news, analysis and consulting services for the display industry, with special attention to projection products. Tracking the complete supply chain from components to finished products and the distribution channels, Insight Media follows technologies, markets, business and trends in displays and display-related application markets. Broad coverage is offered through our newsletters and conferences with in-depth analysis available via our reports and consulting services. Insight Media has a world-class team of industry analysts and associates to provide comprehensive coverage and analysis of the display industry.

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