E Ink Grabs Philips Deal

E Ink Corp., a Cambridge, Mass., startup that makes electronic ink used in signs and other digital devices, has received a $7.5 million investment from Philips Components, a division of Royal Philips Electronics of the Netherlands , and the companies will jointly develop
e-ink displays for handheld devices.

E Ink will use the cash on research and development, notably to build a prototype high-resolution display that can be used in personal digital assistants and other handhelds.

E Ink will develop electronic ink sheets, which Philips will integrate with its matrix backplanes and drivers. Philips Components will then get the global rights to make and sell handheld display modules using E Ink’s technology, including exclusive rights for an unspecified period to sell PDAs and electronic books with the displays.

E Ink makes a liquid filled with millions of microcapsules, each containing white particles suspended in dark dye. A grid of transistors embedded in thin plastic film creates electric fields that cause the e-ink to switch from black to white, creating images in the shapes of letters or pictures.

The plastic coating, which was developed by Lucent Technologies, allows for a display panel one-quarter the thickness and weight of a standard liquid crystal display panel. The displays are brighter and use far much less battery power than LCD panels, allowing for smaller battery designs for cell phones, PDAs and other
handhelds.

Based in Sunnyvale, Calif., Philips Components makes nearly a quarter of LCD panels sold around the world.

E Ink and Philips said commercial production of the displays is expected to begin later this year.

Philips Components CEO Matt Medeiros said, “E Ink’s display technology is perfect when readability is of primary importance. In the handheld appliance market, E Ink can dramatically improve screen definition and power requirements, delivering a lighter, easier-to-read display that will revolutionize smart handheld devices. We
expect to be the first electronics company to commercialize this technology.”

E Ink CEO Jim Iuliano said the investment helps the company toward its goal of selling e-ink technology for the handheld market and, ultimately, for erasable electronic books.

Two weeks ago E Ink laid off 37 of 137 workers as it began a planned shift from using its technology in large display signs for retail stores to the handheld market.