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NOVEMBER 27, 2000 VOL. 156 NO. 21

Big-Time Screen Play
LCDs have had their day: in Japan, the race is on to develop better, brighter displays for 3G phones

Wireless War

Japanese mobile-phone manufacturers take aim at Nokia and Ericsson in the battle to dominate the coming market for third-generation handsets. Can the Europeans hold the fort?
Entering the Fray: Outsiders want a piece of the action, too
Role Model: NTT DoCoMo's stunning success with the i-mode offers valuable lessons for all of Japan Inc.
Thumbs Up: A look at Japan's mobile-phone culture

If 3G phones are ever going to live up to their hype, they will need a bigger, better display screen. Without it, the video and animation that's supposed to come beaming across and "change the way we work and play" may end up looking like Al Gore's math: fuzzy.

COVER: There's No Turning Back
Two weeks later, the world still awaits a definitive result. The mood in Florida is getting ever more rancorous and ugly, but neither candidate can afford to give up now

THE PHILIPPINES: It's Hitting the Fan Now
The impeachment of President Joseph Estrada threatens to take the lid off the region's most volatile democracy
Viewpoint: Let Asia's elected leaders finish their terms

Japanese mobile-phone manufacturers take aim at Nokia and Ericsson in the battle to dominate the coming market for third-generation handsets. Can the Europeans hold the fort?
Entering the Fray: Outsiders want a piece of the action, too
Role Model: NTT DoCoMo's stunning success with the i-mode offers valuable lessons for all of Japan Inc.
Thumbs Up: A look at Japan's mobile-phone culture
Big Screen: Say goodbye to those old phone displays

GOLF: Homecoming Daze
He may be all-conquering on the course, but Tiger Woods didn't win many new friends on his visit to Thailand

EXHIBITIONS: National Treasure
Exquisite works by Japan's 17th-century master Koetsu

CINEMA: Guardian Angel
How Cheung-Yan Yuen got Charlie's Angels looking so good
Young Turks: A new direction for Taiwan film

TRAVEL WATCH: Finding Peace in a Himalayan Hideaway

Whoever develops this better mousetrap could dominate a market worth billions of dollars. "Companies are waging a fierce battle for next-generation mobile phone screens," says Tomohiro Murata, an analyst at Morgan Stanley Dean Witter in Tokyo. Ground zero in this battle is Japan, whose researchers have led the way ever since the world's first liquid crystal displays (LCDs) were developed for calculators back in 1973. Most mobile phone screens are still a basic form of LCD, though these are vastly improved from the technology's dinosaur days. But they just aren't good enough for 3G phones. Even on the color screens that became available last year, images are blurry, and animation is jerky and shadowy.

One of the key researchers working on a better display screen is Shumpei Yamazaki, reputed to be among Japan's most creative engineers. Yamazaki, 57, is president of R. and D. company Semiconductor Energy Laboratory, a research institute affiliated with electronic parts maker TDK Corp. Unlike most labs under big manufacturers, Yamazaki's is making money—revenues last year totaled $90 million, gleaned mostly from 2,600 patents. Yamazaki, a pioneer in the semiconductor business, started tinkering with integrated circuitry when he was a college student. He garnered 130 patents while still in his 20s. Now he has shifted his focus to display screens, a natural transition since semiconductors are the key components in the technology. He is clearly turned on by the challenge. "Man gets information by hearing and seeing," says Yamazaki with an easy smile. "Screens with high fidelity can convey emotions and stir imagination that words cannot."

Beyond such heady talk, Yamazaki and rivals at bigger companies are racing to perfect a technology called organic electroluminescence (OEL). The material shines like a lightning bug when electric currents pass through a thin layer of carbon-based elements. OELS consume less power and display crisper images than LCDs. U.S. photographic film manufacturer Eastman Kodak discovered the material in 1987, and TDK paid handsomely (it won't say how much) to develop the first OEL panel in 1995. Sizing up the new technology, TDK's executive vice president Shunjiro Saito realized at the time that the company's previous bread-and-butter business, ferrite core parts for cathode-ray tube screens in conventional TVs, was doomed. "When I read the research paper on OEL," says Saito, "I thought, 'This is it!'"

Yamazaki originally partnered with his former employer TDK to develop the OEL panel, but when the company didn't give him special credit for his work, he struck out on his own. In recent years, he has acted more like an American high-tech venture boss than a loyal Japanese employee. First he teamed up with LCD giant Sharp Corp. to develop a sophisticated silicon technology to improve LCD performance. Then earlier this year, after his company obtained a basic patent for cutting-edge OEL circuitry known as "active-matrix OEL" that would vastly improve the quality of video images, he provided a sample to TDK's rival, Tohoku Pioneer. A subsidiary of the audio-tech manufacturer Pioneer, Tohoku Pioneer had already beaten TDK in the race to make OEL panels for car radios in 1997; it has since become the industry leader, providing OELS for cell phones in partnership with Motorola.

There are other firms competing to make hot, new-generation screens. Sanyo Electric, in cooperation with Eastman Kodak, has developed prototypes of ultra-thin full-color screens targeted for sale in 2002. Sharp's high quality LCD, which can handle animation as clearly as a television screen, will become available next month from J-Phone, Japan Telecom's wireless carrier. Meanwhile, Sharp has taken a more cautious approach to OEL, citing the system's weaknesses in color display and panel longevity. "The question is whether active-matrix OEL can be mass-produced," says Sharp's president Katsuhiko Machida.

While it's unclear who will win the battle for market share, it's a safe bet that OEL will emerge as a major player in the mushrooming display technology market. "The potential is extremely high," says Hiroyuki Yoshida, a Tokyo-based senior analyst at Wit Capital Japan. He predicts that the OEL market will expand from its current 500,000 units per year to 40 million in 2005. Yamazaki can't wait. His earlier inventions helped to build a multibillion dollar business. He's hoping to hit the jackpot again with display screens.

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