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e-Reader Supplier PVI Buys E Ink

6/02/2009 09:39:00 AM Eastern

Taipei, Taiwan. — Prime View International (PVI), supplier of the Amazon Kindle and Sony Reader, has purchased the supplier to another leading e-reader, E Ink of Cambridge, Mass., for $215 million.

The purchase will result in improved displays for e-readers and expand production capacity, said PVI.

iSuppli predicts the market for e-readers such as the Kindle will grow from 1.1 million units in 2008 to 20 million units in 2012, marking a cumulative annual growth rate of 105 percent over the four year period.

PVI and E Ink already collaborate on creating displays used in the Kindle and Sony’s Reader.

“We make the display and they integrate the electronics into the display, said E Ink VP marketing Sriram Peruvemba.

E Ink’s technology allows easy to read text that sits close to the screen and creates little drain on the battery of an e-reader.

With the merger, PVI gains intellectual property and employee talent, “while securing supply of a critical component during the rapid growth phase of the market,” it said.  E Ink will continue to supply its products and gains funding for production and faster product development.

E Ink and PVI currently support nearly 20 e-reader manufacturers worldwide. E Ink sales, which include displays in cellphones and other devices, was $18 million in the first quarter of 2009, up 157 percent over the same quarter in 2008, it said.

E Ink will remain headquartered in Cambridge, and plans to expand its employee base from 127 to 150 people during 2009.