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UniPixel: Intel Shows Its Touch Sensor Hand

|Includes:Uni-Pixel, Inc. (UNXL)

The Intel Developer Forum (IDF) is taking place on 4/10 & 4/11 in Beijing. One of the technical sessions at IDF is titled "Touch On All Client Devices and The Ecosystem To Support It." The talk is supposed to address forecasts for touch sensors in notebooks, ultrabooks, and All-In-One PCs in 2013, Intel's initiatives to increase supply and lower cost for touch sensors, and current and prospective technologies to meet the growing touch demand at new lower price points.

In past instablog posts I've noted how crucial it is for Intel and Microsoft to find a large supply of inexpensive touch sensors. Doing so could move the needle quite a bit in terms of notebook/ultrabook/AIO sales, and could help these ecosystems in their battle against Apple's iPad.

Intel has placed its bets and the company is showing its hand to all of us at IDF. Look at the list of speakers at the session. It includes FlatFrog, Cambrios, and UniPixel. Intel has scoured the world for the last couple years trying to find technologies that could fill the void in large-display touch sensors, and these are the three technologies they've engaged.

Intel has spread its bets. They're covering the materials angle with Cambrios, the optical solution with FlatFrog, and the printed mesh with UniPixel.

FlatFrog is an optical touch sensor manufacturer based in Sweden. Intel made a $25mn investment in the company last year. They've recently done another raise with Invus and Promethean leading. FlatFrog is using the funds to commercialize touch sensors for the very large display market. They target education, gaming, hospitality, and digital signage. They are still deveoping solutions for the markets which UniPixel addresses. I would imagine their technology is similar to that of Neonode, but they seem to be a bit behind NEON in smaller displays.

Cambrios makes ClearOhm coating material that replaces ITO in an industry standard touch sensor. Cambrios has some impressive wins and has made good progress. Yet this wager seems to be more about Intel's hedging against rising ITO prices than anything else. Cambrios can potentially lower the materials cost in a touch sensor, but it relies on the expensive and time-consuming production processes associated with the ITO touch sensor supply chain.

UniPixel is the latest addition to Intel's hand. Intel evaluated every metal mesh solution known to man before teaming with UniPixel. They would have looked at Fuji, LG Chem, Toppan, DNP, Kyodo, Mirae Nano, Atmel and others. But Intel decided that UniBoss was the right horse for the wager. This speaks volumes to UNXL's claims that they have the only truly additive, copper-based product available. It also speaks volumes to the idea that UniBoss involves a highly scalable production process.

With Intel's bet, evaluating UniPixel is no longer a game of trying to figure out how much demand there is for UniBoss. We now have volume commitments from Dell and Intel for 12mn units/yr each, and we know that the numbers can get much larger than that - quickly. It's no longer a competition with Fuji, or XSense, or ITO, it's now just a matter of how much UniBoss UniPixel can produce and how quickly they can produce it.

Disclosure: I am long UNXL.

Stocks: UNXL