Display Tariff No Big Deal?

Yes, at least in the near term.

The recent decision of the International Trade Commission to impose a 67% tariff on active matrix LCD displays imported from Japan will have minimal effect on the pen computing industry in the near term. Says display technology expert, David Mentley, of Stanford Resources (San Jose, CA), “the ruling probably won’t have much effect [on the pen market] since it excludes supertwist displays.” Indeed, most active matrix displays are designed for color applications, which will not appear in pen-based systems for at least a couple of years.

Nevertheless, there are possible long-term implications for the pen market. The tariff may force U.S. manufacturers of portables such as Compaq and Apple to begin manufacturing machines with active matrix displays “off shore,” unless the U.S. display suppliers, whom the tariff is designed to protect, can deliver sufficient quantities of these displays at competitive prices. Many observers are skeptical that the U.S. display industry can compete in price and volume with the Japanese active matrix display manufacturers.

And once companies such as Compaq and Apple begin manufacturing color portables overseas, what’s to prevent them from manufacturing black and white supertwist pen systems overseas? Computer manufacturers will eventually offer notepad computers with optional color displays. It will then become more cost effective to manufacture both black and white and color machines at the same facility.

The first generation of pen-based systems will all have supertwist LCDs. But the tariff could cause problems further down the road.