New US Technology Aims to Compete With Japanese

`ACTIVE addressing" may never become a household word, but if Paul Gulick has his way the technology will soon find its way into many homes.

Mr. Gulick heads a start-up venture that plans to use the technology to cut the cost of high-performance screens for portable computers and other devices.

If successful, Motif Inc., based in this suburb of Portland, Ore., would shake up the market for flat-panel display screens, now dominated by big Japanese electronics firms such as Toshiba, Sharp, and NEC.

The worldwide market for such screens - now $3 billion - is expected to more than double by 1999, with applications not only in "notebook" computers and videogames, but also electronic maps in cars and hand-held "personal navigators" that could provide the location of stores and reviews of nearby restaurants.

Japanese companies have invested billions of dollars in flat-panel screens capable of showing full-color moving images comparable to those of cathode-ray tube screens in desktop computers and TV sets.

The catch: Making these screens is very expensive, while cheaper screens can't show moving images. The high-quality image depends on almost a million tiny transistors etched on the glass screen using a process similar to making a computer chip. Each transistor can be turned on and off to create a complete image each instant. This "active matrix" thus outperforms the "passive matrix" screens where images are created row by row. But the high cost puts devices with better-quality screens out of reach for ma ny consumers.

Until now, that is. "We've been ... the lone voice in the wilderness crying out, `Passive matrix is not dead'," Gulick says of In Focus Systems Inc., the Tualatin, Ore., company that developed "active addressing."

The system uses mathematical formulas to allow the cheaper passive-matrix screens to approximate the performance of active-matrix ones. In Focus found a way to send, or "address," the signals in any sequence so that any part of the screen could be addressed at a given time. Though not as good as active matrix, it offers 90 percent of the performance at much lower cost.

With prototype in hand, In Focus sought a bigger, wealthier partner to move ahead quickly with its idea. The result is Motif, formed just over a month ago with ownership split 50/50 between In Focus and Motorola, the semiconductor manufacturer based in Schaumburg, Ill.

Motorola's $22 million investment - 20 percent ownership of In Focus - will help Motif become the first high-volume producer of passive-matrix display in the United States, Gulick says.

Typically more than half the output of active-matrix plants has to be scrapped; as yields improve, prices are dropping. But plants for making active-matrix screens can cost $500 million, Gulick notes, versus $50 million for a passive-matrix plant. Active-matrix screens will still cost $600 or more in 1995, predicts David Mentley, a market researcher with Stanford Resources Inc. Color passive-matrix screens will be about half that price.

Motif's system is "very promising for a lot of applications," comments Ken Salsman, business development manager at the David Sarnoff Research Center in Princeton, N.J., which also does research in flat-panel displays. With active addressing, he says, "they've really stumbled on something very unique."

Kenneth Flamm, a Brookings Institution economist specializing in high-tech issues, takes a cautious view of Motif and other companies that are trying to create new revolutions in display technology: "They all hold promise," he says.

Next year Motif will build its own manufacturing facility here in Oregon to make passive-matrix display panels that for use in products made by In Focus and Motorola. Motorola could use the technology in video telephones, for example.

The joint venture plans to sell integrated circuits that will allow other firms to use active addressing in products. "Our approach is to give these guys a way to participate" in using the technology, Gulick says. That strategy will bring quick revenue and may deter rival technologies.

Many observers argue that the display industry is crucial and a consortium of companies which In Focus will not join intends to seek Pentagon funding. Claude Barfield, an American Enterprise Institute scholar, says aspects of the industry may warrant government funding for pure research. But "these guys should be directed to capital markets first."