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InFocus, TCL Form Joint Venture

12/15/2004 12:49:00 PM Eastern

Wilsonville, Ore. – Video projector manufacturer InFocus and China-based consumer electronics manufacturer TCL Corp. have signed a definitive agreement to form 50-50-owned joint venture company for the development, manufacturing and sales of rear and front-projection engines for projectors.

The new company, which will be called South Mountain Technologies (SMT), will have headquarters in Shenzhen, China. The company will use engineering teams from InFocus’ U.S. and Norway operations, and TCL’s laboratories in China.

The joint venture will consist of an offshore parent holding company with three wholly owned subsidiaries; a manufacturing research and development subsidiary in Shenzhen, China, and research and development centers in the U.S. and Norway.

The company will look to develop low-cost, high-quality video projection systems for global OEM customers.

David Glass, InFocus worldwide research and development senior VP, will be SMT’s chief executive officer.

Previously the two companies have worked together through the Thomson-TCL Electronics joint venture company, which produces televisions for the global market. TTE had used an InFocus-developed DLP engine to produce and market the world’s thinnest rear projection television set.

InFocus and TCL will each invest $10 million in 2005 to startup the joint venture. Initially, each company will spend up to $1.5 million to cover start up and organizational expenses, pending approval of the transaction by Chinese governmental authorities, TCL said.

According to a company statement, SMT will “integrate the low-cost, high-quality manufacturing capabilities of TCL with the innovative technology leadership of InFocus in digital projection product design.”

SMT will leverage InFocus' imaging devices expertise including multiple technologies for rear projection and front projection engines “to provide the best price performance solutions to customers around the world,” the companies said.

The company will be established as an affiliate Original Equipment Manufacturer (OEM) of projection solutions for each parent company as well as other manufacturers in China and the global market.

The company plans to begin manufacturing operations “upon approval of the joint venture formation by the Chinese authorities,” which is expected in three to four months.

According to a statement on the project, SMT plans to begin shipping rear projection engines for sale in the second quarter of 2005.

“SMT is the next phase in the evolution of our offshore manufacturing strategy as we take advantage of TCL's economies of scale and low-cost manufacturing expertise to license our technology to a broader market space through an affiliated OEM manufacturer,” said Kyle Ranson, InFocus CEO.

“The joint venture is a key element of a major initiative in our global business expansion into digital video products, by providing us leading edge optical engine and projection designs from InFocus for our Thomson, RCA and TCL brands,” said Robert Hu, TCL Corp. senior VP.