Kodak focuses on touchscreen markets

• Touchscreen industry developments are creating new manufacturing opportunities for firms like Kodak
• Kodak%27s expertise at making film gives it a leg up on producing a new metal mesh technology
• The touchscreen industry is expected to double to %2432 billion by 2018

The basic technology underlying the booming touchscreen industry is in the midst of a major transition and Rochester is poised to capitalize on the new developments.

More than 90 percent of touchscreens use transparent indium tin oxide (ITO) as the conductor that detects fingertip motion. But, experts say, ITO is expensive, difficult to work with, and found only in one area of mainland China, which controls its availability and price.

A new alternative approach uses virtually invisible nanoscale lines of copper or silver instead of ITO to form a metal mesh conductor for smartphones, tablets and other devices.

The advantages could lead to a major shift in manufacturing and provide enormous opportunities for developers of the new metal mesh technology.

While ITO must be applied to a stiff surface, such as glass, metal mesh can be used on flexible surface or substrate, and that's where Eastman Kodak Co. comes in.

Industry doubling

Kodak's expertise and resources for making film naturally gives it a leg up on producing the flexible substrate with a nearly invisible metal mesh "printed" on the surface.

That led to an announcement in April that Kodak and UniPixel Inc. agreed to manufacture touch sensors in Eastman Business Park. The $24 million plant is now under construction in Building 326 at the park.

"UniPixel hasn't had a purchase order yet. Right now they're ramping capacity to meet anticipated demand," said Grant Stude, an analyst for Liolios Group in Newport Beach, Calif., an investor relations firm representing UniPixel.

By the end of 2013, UniPixel's Rochester facility is expected to have a capacity of 1.3 million square feet of touchscreen sensors and employ 65 to 75 workers, who will largely come from other Kodak operations, such as film manufacturing.

And, in June, Kodak and Kingsbury Corp. announced an agreement to set up a manufacturing plant in Building 318 at the park. Kingsbury, which now has about 60 workers, is planning to invest about $10 million, create about 50 jobs initially, and a total of about 200 in three years.

In addition to establishing a manufacturing plant to supply customers with touchscreen sensors, Kingsbury also will make and sell the machines and process to other manufacturers.

Lower-cost alternative

Carestream Health Inc., which is headquartered in Rochester, will also make touchscreen sensors at plants in Colorado and Oregon.

The potential economic impact of the industry in Rochester is huge. The touchscreen industry is expected to double to $32 billion by 2018. The demand is being driven by the dramatic increase in sales of touchscreen devices — up from about 200 million units in 2007 to more than 800 million last year. And that demand will be extended by the release of the Microsoft's Windows 8 operating system last fall, which incorporates a touchscreen user interface.

"If you have a lower-cost alternative that performs better than ITO I think that's where the market will be moving to," said Stude.

The Rochester share of the market could reach into the billions of dollars, said Kingsbury owner and CEO Bill Pollock.

"The market is so big you don't have to be the dominant player to do well," he said.

Uses for touchscreen technology may be limited only by the imagination. It's expected to become more common in automotive navigation and control displays, appliances, and other everyday devices.

But the shift from ITO to metal mesh won't be immediate.

"What makes ITO so attractive is it's been the dominant material for decades," said Paul Herro, Carestream's general manager for advanced materials, in Oakdale, Minn.

"There's a whole supply chain that's geared around this one material. So phasing it out isn't something that will happen overnight. But with novel materials like ours and others, we expect to make some pretty significant inroads pretty quickly and show a pretty compelling reason to switch over," he said.

Carestream entered the touchscreen field a little over three years ago and now has one plant near Fort Collins, Colo., and a second near Medford, Ore., said Paul Herro, general manager for advanced materials, in Oakdale, Minn.

"Our primary targets are smartphone, it's tablet PCs, laptop PCs which are really adopting touch enabled characteristics because of Windows 8," Herro said.

Herro would not provide specific sales figures, but said the company, which introduced the product this year "has had commercial success with a number of touch panel manufacturers."

The bulk of their sales have been in Asia, he said.

"Our product is a roll of film. Our customers are touch panel manufacturers. They take our film, they process it, they supply a component then to the end device makers who could be a smartphone maker, could be a tablet, could be a laptop, could be any device," Herro said.