By Peter Wolchak

This story begins in 1990 at a research firm in Fort Saskatchewan, Alta. The story moves to Toronto, makes quick trips to Japan and the U.S. and will visit there again, but stays based in central Canada. By 2006, the tale will culminate in the complete rewiring of the world’s television market.

That’s an ambitious scenario but it is borne out by industry watchers who say existing flat-screen television technology is both expensive and flawed. Only very large plasma sets can produce a High-Definition image and LCD has performance issues, subjecting viewers to action blur when players scramble in the corner for the puck.

But a new flat-screen manufacturing process currently under refinement at R&D firm iFire Technology will, according to the experts, deliver better picture quality than either plasma or LCD TVs and won’t hit consumers in the face with a huge price tag.

“The iFire technology is vastly different. No one has ever produced a TV screen the way iFire is doing it — this is totally new and revolutionary,” said J. Marvin Wolff, a senior analyst and founding partner at Paradigm Capital in Toronto, who has been following iFire since 1997.

“What we’re looking at is a category killer.”

IN THE BEGINNING
But in 1990 no one at The Westaim Initiative predicted any of this. Westaim, the R&D arm of Sherritt Inc., housed about 100 research scientists and engineers at a small facility in Fort Saskatchewan. The group was primarily interested in the manufacture of industrial materials.

It was an unfocused research environment where people essentially pursued whatever projects interested them, according to Xingwei Wu, who, at the time, was a young research physicist.

“The leaders of the company really had no idea what to develop.”

Wu was interested in thick-film dielectric electroluminescent (TDEL) processes — a way to make flat-screen monitors that required far less precision than the contemporary thin-film procedure used then and today to make LCD and plasma screens.

At issue are the pains manufacturers endure to make flat-panel screens. With LCDs, for example, the layers used to make the pixel transistors are between 0.1 and 0.5 microns thick. That means a piece of dust one micron in size will wreck the portion of an LCD screen it touches. LCDs are therefore manufactured in clean-room facilities, but even these cannot eliminate all dust, and the output of usable glass is reduced every time a speck hits a screen. By contrast, the insulating film in a thick-film process may be 10 to 20 microns thick, so small specks of dust are simply coated over. Fabrication facilities can be less sophisticated and there are fewer costly manufacturing defects.

Wu submitted a two-page proposal and landed $50,000 in seed money. The process he envisioned used a squeegee-like device to push a dielectric(insulating)material through a mesh and onto a glass substrate. This would form the screen of the monitor.

Conceptually, the process is similar to silkscreening a T-shirt.

The research showed promise and between 1990 and 1994 Wu spent several million dollars in development, creating two and four-inch monochrome displays and then moving to colour research in 1994.

Then, in 1996, Tony Johnston joined Westaim. It was a propitious hire. The former airline executive headed up a four-person panel tasked with sorting out the group’s various research projects.

Some would continue to receive funds; others would be axed.

“We had to look at all these R&D projects — there were about 20 — and decide what to do. Did we want to commercialize them or abandon them all? Those were tough decisions.

Some of them were great ideas but were just not going to be big business opportunities,” Johnston said.

The panel would ultimately select three projects based on business potential. At first, Wu’s initiative did not look too promising.

“It was a little monochrome display. My initial reaction was ‘This one will be on the chopping block.’ It didn’t look like much, and these guys wanted to compete with the display industry, who were giants in Asia,” Johnston said.

“However, we didn’t dismiss it right away, but the problem at the time was no one was able to scale it or create a colour display. So in 1997, we set some milestones; they had to, for example, create a colour display by the end of the year.”

Wu’s team achieved this goal, others were set, and soon the display technology was looking a lot more promising. But there was another problem: the group needed to work on scaling the technology by building a 17-inch screen and the Fort Saskatchewan facility was not up to the job.

Then a lucky thing happened. Litton Systems Canada decided to sell off its 36,000 square-foot fabrication facility in Toronto. Buying this plant was far cheaper than building a whole new facility, so in mid-1998 about 30 people left Alberta and moved east.

By early 2000 the group adopted the iFire Technology moniker and signed a US$25 million non-exclusive licensing agreement with TDK in Japan for displays smaller than 12 inches. Then in mid-2002, the company announced a pivotal development agreement with Sanyo Electric Company of Japan. This agreement was expanded in March 2003 to include mid-30-inch screen development and accompanied by a deal with Dai Nippon Printing in Japan, one of the world’s largest communications companies, who will work with iFire on the development of flat-panel modules, the working guts of televisions.

iFire also landed favourable reviews from U.S.-based financial analysts and investors.

And then in December of 2003 iFire produced its first 34-inch prototype TV. The company is currently expanding its facilities to begin pilot production of this monitor. The old Litton plant is a good R&D facility but new equipment is required to deliver the level of process automation required for producing mid-30-inch modules.

COMPETITIVE LANDSCAPE
Which brings the story to today. Industry analysts and business partners are confident iFire’s technology will do two things: outperform any other flat-screen technology,
and do so at a significantly lower price point.Contributing to this expectation is the fact that the competition is saddled with weaknesses. Plasma, for example, “needs an incredible complexity of electronics on the backboard” to make it work, said Paradigm’s Wolff. “In contrast, with the iFire technology there are essentially no complex electronics at all.”Also, plasma TVs typically start at about 40 inches, so they’re big-ticket items, and can only produce true High-Definition at large sizes. iFire’s technology is HD out of the gate.LCDs suffer from a response time that is noticeably slower than that of TVs based on cathode ray tubes, said Elliott Schlam, president of the consultancy Elliott Schlam Associates in New York. “During a high-speed scenario (such as) a football or hockey game, there will definitely be a blur with LCD. That simply isn’t the case with the iFire technology.”Wolff said response time for LCDs is typically 22 milliseconds. Samsung has reduced this to 12 milliseconds, “but while that’s better it’s not perfect.”And then there’s price. While technology tends to get cheaper as it matures, there are certain costs hard-wired into both LCD and plasma production that will never go away.“Because iFire’s process uses no gasses, no liquids and no vacuum, it is much easier to manufacture. It is less complex, has fewer steps and uses fewer materials to manufacture and it therefore has a significantly lower cost of production,” Wolff said. “When it comes out it will do so at a significantly lower cost to the consumer.”Schlam said those cost pressures will always be present. “Even when [plasma and LCD] technologies are running at their most economical and highest yield, the iFire technology will still be less expensive, and that will always be the case.”And iFire itself is happy to point to the money issue. “The main reason for us to be in business right now is price,” said Don Carkner, iFire’s vice-president of product planning. “Most people would buy flat-panel TVs if only they could afford them.”LCDs fall further behind in the price race when you consider larger-screen units. Thirty inches is the current practicable upper limit, although Samsung recently showed off a 57-inch LCD TV. “But they didn’t announce a price and there aren’t any in the stores,” Wolff said. “Down the road could there be a 50-inch LCD TV? Maybe, but the price would kill you.”Carkner said iFire does not plan to manufacture finished televisions; rather, it will produce modules — the innards — and sell them to manufacturing partners to assemble into full TVs. His best estimate is that iFire’s modules will cost about US$400 18 to 24 months from now. Large-screen LCD modules are currently selling for about US$1,200 and plasmas at approximately US$1,000, and that will not change significantly in the near future. Hiroki Hamada is the senior manager of the Microelectronics Research Center, Thin-Film Devices Department, at Japan’s Sanyo Electric Co. His company sold approximately six million televisions in 2003, and he expects TVs based on iFire’s technology to have a 30 per cent cost advantage over LCDs or plasma by 2006. “iFire’s panel is basically different from LCD or plasma,” he said. “Even if LCD or plasma technology is improved, iFire’s panel will keep its advantages.”THE YEARS TO COMEWith all these technical advantages, will iFire change the worldwide television market? Many think so.“We feel that iFire’s panel has a possibility of becoming one of the most attractive candidates for a future panel,” said Sanyo’s Hamada. According to Schlam, if the company can maintain its current progress, it will “significantly alter the dynamics of the flat-panel display industry. The worldwide market for TVs is between 100 and 125 million pieces annually. In recent years, large-screen TVs have become more popular, and there will be millions of flat-panel TVs sold in a few years. In that time, iFire has to follow the right path and have some luck along the way, but…it should be a significant player four or five years down the road.”Paradigm’s Wolff said North Americans are demanding better televisions.

“A few years from now you’re going to see flat panels dominate, you’ll see 16-by-9 as the dominant format and you’ll see High-Definition as a requirement. So if you look out to 2008, the companies that can offer all that at a low price and good quality will own the market.“Once the realization hits that iFire is the next big technology then all the major players will jump on the bandwagon. It will be like bees to honey. We now have computers that say Intel Inside. In the near future we will have TVs that say iFire Inside.”iFire is, according to Wolff and others, Canada’s most innovative technology company. “iFire is definitely a leader in Canada and completely undiscovered by the bulk of the population. From the point of view of impact — in terms of what it will do to the industry and in terms of everybody’s daily lives — it is hard to come up with anything else like this technology,” Wolff said.All of which is sweet music to Tony Johnston, the man who initially backed Wu’s display technology and who is now president of iFire. But he is the first to chime in with a cautionary note.“Back in 1996 this whole thing was a massive long shot. And today it still has risks involved; there may be another technology out there that we don’t know about. And we haven’t produced a (full-production) product yet. We don’t believe there’s any manufacturing risks left, but anytime you go from prototype to pilot to volume manufacturing you face hurdles.”Johnston said his industry is littered with the carcasses of big failures. “Back in 1998 they were saying plasmas would cost $1,500, and they’re still not there. “Organic LEDs is another classic example. Two years ago OLED was it, everyone was going OLED, Kodak was licensing it and Sanyo did a US$300 million deal with Kodak and it was going to be in TVs and would replace LCDs.“Today, the only thing that has come out of the OLED market is one digicam display, and they’re still struggling to get product to the market.”And then there are LCDs. “Every year this industry goes through waves of latest and greatest, but there are always hurdles,” Johnston said. “Last year…everything was going to be LCDs. The LCD industry has made zero dollars in profit because they had to invest hundreds of millions if not billions of dollars in the industry.”Because of that, Johnston stays well away from grandiose statements.“For me, the hurdle is getting to (a full-production) product. I don’t have real concerns in my mind on the volume manufacturing side, there are no big surprises there. These are all processes that can be done today. But you have to still build product.“About the future I am conservative. Maybe it’s our humble Canadian way but it’s not done until it’s done. We are very confident in the technology but it’s not done until it’s done.”That’s his business acumen talking. Then, asked how he feels about this technology and its future, Johnston sits back in his chair, glances at the ceiling and smiles a little.

“I am extremely excited. We had a very busy year in 2003 and we are all fatigued, but this could be the single greatest consumer technology to come out of Canada. We have spoken to the biggest names in international electronics, people who look at this and understand its potential, and they say this is a disruptive technology. “This is an exciting story, and it’s only going to get better.”