Sintek Photronic, a leading Taiwan flat-screen component maker, has tied up with Samsung to produce advanced touch-screens for next-generation smartphones, officials said Wednesday.
The Taiwanese firm forged a technology cooperation and supply agreement with the South Korean tech giant on Tuesday, according to a statement posted on the website of the Taiwan Stock Exchange.
Sintek did not disclose the investment value, nor did it say how much Samsung would spend on the project, but the Taipei-based Commercial Times reported the plant will cost Tw$20 billion ($680 million).
The statement said Sintek will set up a display plant, and from the fourth quarter of this year it will start supplying its South Korean partner with touch-screens and related products using a new technology called AMOLED.
The technology consumes significantly less power and produces higher resolution images, so it is expected to be widely used in future portable electronics where power consumption is critical to battery life, analysts say.
"Samsung must have seen the great potential and realised that it cannot possibly meet the anticipated vast demand on its own," Kuo Ming-chi of Concord Securities told AFP.
For the time being, demand comes mainly from producers of smartphones, but it will surge if the technology also begins to be widely used in tablet computers, he said.
Samsung, already operating one plant of its kind, plans to add two more before the end of next year, Kuo said.
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