Tempe, Ariz. — TV manufacturer Syntax-Brillian said it has reached an agreement in principle with Henan Costar Group to form a joint venture company in China for the manufacture of LCoS-based light engines.
Henan Costar Group is a wholly owned subsidiary of the Chinese Government-owned China South Industries Group (Costar). The agreement calls for the development of production facilities for the assembly and sales of LCoS light engines for microdisplay projection televisions.
Costar will own 51 percent stake in the venture, which has not been named, with Syntax-Brillian owning the remained 49 percent.
According to a statement on the deal, the joint venture will assemble and sell LCoS-based light engines to TV manufactures initially in China and eventually to the rest of the world. The company will use Syntax-Brillian's proprietary LCoS imagers exclusively in the light engines to be manufactured by the joint venture.
Syntax-Brillian will pay for its stake in the company, which is valued at $2.45 million, “through the contribution of light engine technology and certain light engine manufacturing equipment,” the statement said.
Under the deal, Costar will contribute assets, including cash and a manufacturing facility located in China's Henan Province, valued at approximately $2.55 million.
Formation of the joint venture is subject to execution of a final agreement, which is expected to executed by March 31. The parties have signed a short-form agreement, which has been ratified by the boards of the respective parties.
The company is expected to begin limited production by May 31, ramping up to volume production in July. The targeted production volume of the joint venture is 300,000 light engines annually.
According to the statement, Costar believes that at least two major Chinese domestic television manufacturers will adopt the light engine design before Sept. 30.
“The significance of this joint venture to us is fourfold,” said Vincent F. Sollitto, Jr., Syntax-Brillian's CEO and chairman. “First, it provides a volume source of light engines for our use domestically as we introduce the Olevia-branded LCoS RPTV this year. Second, we have secured a high volume customer for our proprietary LCoS imagers. Third, we now have a vehicle to tap the burgeoning RPTV market in China as they prepare for the Beijing Olympics in 2008. And fourth, it gives us a platform to be the high volume light engine supplier to other television manufacturers throughout the rest of the world.”