Future Glass: The Next Touchscreen
Ten years ago, before the first modern smartphones and tablet PCs appeared, the touchscreen was still a novelty, available on just a few high-end consumer devices.
Since then, however, the popularity of this technology has exploded. I probably don’t need to tell you how popular it is because you likely own at least one touchscreen-equipped device.
The size of the market has been growing steadily for the last five years, but now, saturation is approaching (almost everyone who’s going to get one already has at least one).
This means growth in this sector has been dropping and will continue to do so, with revenues already peaked in the $30 billion/year range.
The graph below shows just how this played out.
Progress is inevitable, however, and just as the touchscreen market reaches its peak, the replacement for this once-novel technology is already on the way.
And that technology is the flexible touchscreen — a revolution onto itself.
Already, projections have this newly emerged sector mirroring the explosion of the original touchscreen.
The Opportunity
Although flexible touchscreen technology is certain to become universally adopted by the biggest consumer electronics brands like Apple Inc. (NASDAQ: AAPL), Alphabet Inc. (NASDAQ: GOOG), and Microsoft (NASDAQ: MSFT), it’s the companies manufacturing the core components that stand to profit the most.
UniPixel, Inc. (NASDAQ: UNXL) is among the most innovative companies in this space today.
This Santa Clara-based company is currently developing performance engineered film (PEF) products for the display, touchscreen, and flexible electronics market segments in the United States.
The company develops transparent conductive and flexible electronic films under the Copperhead brand; touchscreen films under the brand InTouch as sub-components of a touch sensor module; and hard coat resin and optical films under the Diamond Guard brand.
It focuses on serving original equipment manufacturers (OEMs) engaged in the production of mass-market wireless devices for the consumer tech market.
Ticker Symbol: (NASDAQ: UNXL)
Share Price: $1.46
52-Week Range: $0.35–$2.88
Shares Outstanding: 44.12 million
Market Capitalization: $65.66 million
12-Month Target: $1.50
Process and Product Line
The Copperhead process produces the company’s line of XTouch Sensors, a new pro-cap, multi-touch sensor that offers the unique advantages of metal mesh technology.
These advantages include higher touch sensitivity, improved touch distinction, better durability, significantly higher conductivity, extensibility to a greater number of sizes and form factors, and faster sensing speeds as compared to standard ITO-based touch technology.
The Copperhead process for XTouch Sensors is also an additive, roll-to-roll, flexible electronics process as compared to traditional subtractive ITO manufacturing.
As an additive manufacturing process, Copperhead is inherently more efficient and sustainable.
It promises lower production costs given its lower material costs, fewer steps in the manufacturing process, and a more simplified supply chain.
Advantages
Hard coat protection for glass and polymer film and sheets provides chemically strengthened glass-like performance at lower cost.
Depending on the underlying substrate, up to 9H available scratch resistance improves product service life while maintaining product aesthetics.
Diamond Guard resin is available by the barrel to meet immediate supply chain requirements.
Headlines and Growth Drivers
Jan 19, 2016: UniPixel Expands Customer Base with New 8-inch Android Tablet Win… Tablet to be Manufactured for Major U.S. Wireless Carrier
UniPixel announced that its XTouch sensors and Diamond Guard coating have been chosen by a leading original design manufacturer (“ODM”) for inclusion in a new 8-inch Android tablet for a major U.S. wireless carrier expected to go into production in late 2016.
UniPixel has received an initial purchase order from this new customer for engineering samples to be delivered in the first quarter of calendar 2016.
The Company expects to deliver pre-production samples in the second quarter and production components in the third quarter of calendar 2016.
Jeff Hawthorne, president and chief executive officer of UniPixel, commented:
We are pleased that an industry leading ODM and wireless carrier have selected our XTouch with hybrid metal and Diamond Guard coating products for this new tablet. The attributes of our technology enable the development of devices that are faster, lighter, thinner and that address the evolving needs of the end-user. With the inclusion of UniPixel technology, the new device will support a 2-millimeter tip passive stylus, providing value-added functionality at low incremental cost. This order is another step in the on-going process of proliferating our technology and products throughout the consumer IT ecosystem as we continue to expand our customer base. The steady progress we have made in the development of our technology and manufacturing capabilities is leading to recognition of UniPixel as an innovative solutions provider and reliable vendor to Tier 1 device manufacturers around the world. This is an exciting new opportunity.
February 23, 2016: UniPixel Ships Initial Production Validation Units to New Customer for 15.6-inch Point-of-Sale Touchscreen
UniPixel announced receipt of an order and initial shipment of production validation units for a 15.6-inch touchscreen with XTouch sensors and Diamond Guard hard coat to a new customer for a retail point-of-sale terminal.
This new customer develops and sells touchscreens and touchscreen-enabled systems for non-consumer markets such as retail, digital signage, industrial, medical, transportation, and others.
Jeff Hawthorne, president and chief executive officer of UniPixel, commented:
We are pleased to take the initial steps with this new customer to develop a new product with the potential to substantially expand our addressable markets in the coming years. In addition to more familiar computing devices, such as laptops, tablets, and printers that can utilize our products, we are now being introduced into broad opportunities in the industrial point-of-sale market. This is a large market that will complement the consumer and enterprise products markets into which we currently ship.
The initial order is currently being evaluated and qualified by the customer.
Upon successful qualification, UniPixel expects the product will begin volume production in the fourth quarter of calendar 2016.
March 2, 2016: UniPixel Awarded 2-in-1 Convertible Laptop/Tablet Program from Leading PC Manufacturer
UniPixel announced that it has been awarded a new 2-in-1 convertible program from a Tier 1 customer.
The program will leverage UniPixel’s XTouch highly responsive touchscreen sensors to simultaneously deliver outstanding finger touch and capacitive stylus performance.
The program will also utilize the company’s Diamond Guard hard coat technology to reduce the overall cost of the touch module by eliminating the need for other materials.
Production validation units are expected to be delivered in the second calendar quarter and volume production expected to commence near the end of calendar year 2016.
Jeff Hawthorne, president and chief executive officer of UniPixel, commented:
We are pleased that this leading PC manufacturer, upon deciding it wanted to build a new product with best-in-class touch and stylus performance, turned to UniPixel for our XTouch sensor technology. The low sheet resistance and proprietary design features of XTouch copper-based metal mesh sensors enable an exceptional end-user experience for both finger-touch and stylus usage. Coupled with our Diamond Guard hardcoat, this customer will be able to produce a device that is lighter, thinner, and faster with exceptional stylus performance. Our technologies support product designers who want to offer new devices with thinner bezels and cover lenses.
Mr. Hawthorne concluded, “This is the third business award or purchase order from three different customers that UniPixel has received so far in calendar 2016. We are off to a good start for the new year.”
March 15, 2016: UniPixel Receives Business Award From New Customer for 13.3-inch Notebook PC
UniPixel announced a business award for its XTouch™ touchscreen sensors with Diamond Guard hard coat technology from a leading U.S.-based PC manufacturer for a flagship model 13.3-inch notebook PC.
This is the company’s first business award from this new Tier 1 PC OEM customer and marks a major expansion of UniPixel’s customer base.
Jeff Hawthorne, president and chief executive officer, commented:
We are highly pleased with the receipt of this business award. We continue to gain traction in embedding our products into upcoming devices from major computing device manufacturers. This particular program will leverage UniPixel’s XTouch highly responsive touchscreen sensors to deliver outstanding capacitive stylus performance, as well as our Diamond Guard hardcoat technology to reduce the overall cost of the touch module by eliminating the need for other materials. We continue to make measurable progress in positioning UniPixel among the technology leaders in the device manufacturing segment.
“We expect initial validation units to be delivered in the second quarter of 2016 and volume production to commence in the fourth quarter,” continued Mr. Hawthorne. “This represents the fourth new purchase order or business award from four different customers that UniPixel has received so far in calendar 2016. We are off to an excellent start for the year and look forward to continuing our momentum in the coming quarters.”
May 27, 2016: New Shares Issued, Taking Down Earlier Gains
With share count increasing by 14%, UniPixel’s total shares outstanding goes from 32 million earlier in the year to a current total of 44 million.
June 9, 2016: UniPixel Wins 17th Design Product Supply Program
UniPixel announces that it was awarded a 13.3-inch notebook program from an existing customer for the consumer market.
The program is the 17th design win for UniPixel since the beginning of calendar 2016.
The announcement of this new product win, plus the programs originally acquired from Atmel and the one product announced late in 2015, brings to 21 the total number of programs awarded to UniPixel.
Conclusion
This is a small company with a big product and an even bigger market unfolding before it.
Though still not profitable and pre-mass production, standing orders and rapid developments are destined to change that in 2016.
Recent turmoil has created an excellent entry point, and a swift resolution has effectively backstopped any associated future risk.