U.S. FIRMS BOOSTED TO CATCH ASIA; FLAT PANEL MAKERS TRY NICHE STRATEGY.

Byline: Janet Rae-Dupree / San Jose Mercury News 

They are the windows on the electronics world, the focal point of the latest high-tech devices. Flat panel displays are the screens for laptops, the readouts on gasoline pumps and the pictures shining on camcorders.

They are also an embarrassing gap in the United States' push for technological dominance. At least 85 percent of the world's flat panel displays, and almost all the portable computer screens, are manufactured in Asia.

American companies have decided to play a whole new game. They're attempting a series of technological end-runs in hopes of claiming some emerging, but clearly smaller, parts of the flat panel market. With estimates that flat panels will be a $20 billion-a-year industry by 2000, these niches could be quite lucrative.

``If you compare the flat panel industry to the semiconductor industry, then we're at the 1970s right now,'' said Malcolm Thompson, chief executive of Xerox subsidiary dpiX, a Palo Alto flat panel maker, and chairman of the government-subsidized U.S. Display Consortium. ``We're at the tip of the iceberg. It's the start of the industry as it's rolling out today.''

The current $14 billion Asian behemoth is based largely on a technology - active matrix liquid crystal displays - that the Japanese have been putting into portable computers for several years.

``They understood very early on the uniqueness of this market and its potential,'' said Mike Ciesinski, executive director of the U.S. Display Consortium. ``They invested early, and they're clearly reaping the benefits.''

American companies decided to attack the problems en masse. With Pentagon encouragement, they formed the 14-member U.S. Display Consortium specifically to help create the infrastructure to support the budding domestic flat panel industry.

Today, the San Jose-based group distributes roughly 20 percent of the $45 million annual flat panel budget held by the federal Defense Advanced Research Projects Administration. Companies that win consortium grants must come up with enough private money to match the total; so far, companies have contributed $1.30 for every dollar granted them, Ciesinski said.

In Silicon Valley, dpiX is working on extremely high-resolution active matrix LCD screens of such crisp detail that letters appear more clearly on the screen than they do on a laser-printed page. The dpiX screen displays four times as many pixels, or individual dots, per square inch of screen space as does the best Japanese flat panel on the market today.

The company - which already is distributing prototype screens so that equipment manufacturers can design them into new products - expects to produce 25,000 to 30,000 high-resolution panels from its Palo Alto pilot plant next year. Most are expected to go into military applications.

Candescent Technologies Corp., on the other hand, has turned entirely away from LCDs. The San Jose based company's plan is to manufacture a flattened television using a form of field emission display technology it calls ``thin CRT'' for the cathode ray tubes that power today's TVs and desktop computer monitors.

Instead of the huge, bell-shaped vacuum tubes required by today's devices, Candescent says it has created microscopic cathodes that can work inside a 1-millimeter gap between two pieces of glass. The resulting device would consume less eneggy and generate significantly less heat.

``If our technology can get a real beachhead going, then we can target the same large market that Asia already is in,'' said Bob DuBoc, Candescent's chief operating officer.

Other companies, including Silicon Light Machines in Sunnyvale, Calif., are working on projection-type displays that use microscopic light valves to control a projection that is viewed either on a device's screen or on a wall.

Analysts say it's too soon to tell which of these new American technologies will succeed.

To Ciesinski and others like him, the merit of the flat panel push is self-evident.

``We believe there are several new and worthwhile markets emerging in the United States with the potential to reach $1 billion or more,'' he said of the display consortium. ``Every market is up for grabs . . . and now we have an infrastructure capable of meeting world-class quality standards. That will make all the difference as we establish tomorrow's industry.''

Looking for light

American industry is experimenting with myriad alternate technologies to LCD displays. Some of those include:

Electroluminescent (EL) devices: Naturally light-emitting material is sandwiched between two insulating layers, one coated with vertical wires and the other with horizontal wires. When voltage is applied, ions at the intersection glow.

Field emission displays (FED): Similar to EL devices, these rely on tiny emitter tips that release electrons across a small vacuum space to the screen.

Plasma displays: These sandwich neon gas between two plates, each embedded with wires to form a grid. Each pixel behaves like a infinitesimally small neon bulb.

Projection systems: These use hundreds of thousands of tiny mirrors housed in a special microchip sometimes referred to as a digital micromirror device, or DMD, to reflect light either onto a much larger monitor or onto a wall.

CAPTION(S):

Photo, Box

PHOTO Mike Ciesinski, left, and Bob Pinnel, right, of the U.S. Display Consortium, join Bob Bortfeld of dpiX in holding a flat panel for inspection.

Knight-Ridder Tribune Photo Service

BOX: Looking for light (see text)