Google has invested in the supplier of LCOS chips for Glass.
On Monday Himax Technologies announced (pdf) that Google has agreed to invest in the company's subsidiary, Himax Display Inc. (HDI).
The announcement was made as required by the SEC, and did not provide any valuations. However Himax said that Google will purchase a certain amount of shares in HDI, giving the search engine giant a 6.3 interest in the subsidiary. Google has the option to purchase more shares at the same price for another year, and could own up to 14.8 percent of HDI if Google exercises its option in full.
News of the investment is a sign that Google Glass production is ramping up. HDI produces liquid crystal on silicon (LCOS) chips and modules used in applications including head-mounted displays such as Google Glass, head-up displays (HUD) and pico-projector products. Himax said the purpose of the investment is to fund production upgrades, expand capacity and further enhance production capabilities at HDI's facilities.
Over the last few years, HDMI has devoted its research and development of its LCOS technology for new applications of head-mounted display and other wearable computing applications. The company was founded in 2004 and immediately began focusing on developing commercial applications for LCOS technologies. Google will join the core group of HDI shareholders including KPCB Holdings, Khosla Ventures I, and Intel Capital Corporation.
"Beginning the second quarter of this year, we had already begun expanding capacity to meet demand for our LCOS product line," stated Jordan Wu, President and Chief Executive Officer of Himax. "This investment from Google further validates our commitment to developing breakthrough technologies and state‐of‐the‐art production facilities. We look forward to leveraging this investment and our collective expertise with Google to create unique and transformational LCOS technologies for many years ahead."
Google currently has around 10,000 Glass "Explorer" models out in the wild, and expects to launch the wearable tech on the market by mid-2014. The investment news on Monday confirmed speculation that HDI was in fact supplying LCOS chips for the head-mounted display on Glass. Google also admitted that HDI has been a partner for a number of years.
"Himax Display has been a great partner for several years now," a spokesperson told AllThingsD. "This investment is an extension of this partnership, which we hope will allow the team to continue to develop their operations."
Mark Gomes of Pipeline Data said that HDI's appeal is not in its bleeding-edge technology, but rather its price-to-performance technology. Google could certainly use OLED for Glass, but it would be cost-prohibited. He also speculates that HDI has an annual capacity of two million micro-displays, but will likely grow to seven million at a cost of $25 million to $40 million.
Himax Technologies, which will retain 81.5 percent of HDI after Google's investment, will also be investing money to expand the subsidiary's production. Google's transaction is expected to close in 3Q 2013 subject to regulatory approval and other closing conditions.