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Thinfilm Acquires Kovio Technology, Opens Silicon Valley NFC Innovation Center

Thin Film Electronics ASA ("Thinfilm") (OSE: THIN.OL), leader in commercializing printed electronics, announced today that it has completed acquisition of Kovio technology, intellectual property, and manufacturing assets, and has opened the Thinfilm NFC Innovation Center in the heart of Silicon Valley.

"Adding NFC to our printed electronic memory and sensor platform will allow the seamless exchange of information between Thinfilm's Smart Labels and NFC-enabled phones and tablets," explains Davor Sutija, Thinfilm CEO. "Kovio technology is the only industry-supported NFC interface in printed electronics. We're launching the Thinfilm NFC Innovation Center with a strong NFC team, significantly expanded intellectual property, and pilot manufacturing."

"The acquisition of Kovio technology is an astute strategic move by Thinfilm. Kovio has impressive capability, NFC products and IP that will accelerate Thinfilm's product roadmap, in addition to giving Thinfilm a substantial presence in Silicon Valley," says Raghu Das, CEO, IDTechEx.

Internet of Things-redefining a megatrend

Gartner cites "Internet of Things" as one of the top 10 strategic trends of this decade. Analysts and companies alike are predicting markets in the trillions of dollars by 2020-Gartner $1.9 trillion, IDC $8.9 trillion, Cisco $19 trillion. Industry giants such as Intel, IBM, Cisco, Qualcomm and NXP are placing major bets on IoT, and the San Jose Mercury News calls IoT a technological transformation "as profound as the Industrial Revolution," in which "Silicon Valley companies that make the circuits are expected to profit enormously."

Yet most applications of IoT focus on fixed infrastructure, where the sensor is a static node at the edge of the network and data is routed to a central server.

Low-cost, disposable sensor labels-able to autonomously collect information to later be read by NFC phones and tablets-offer a fundamentally different approach. With over 400 million NFC-enabled smart phones already deployed, a number projected to grow to 1 billion by 2015, linking ubiquitous sensors on Thinfilm Smart Labels with the mobile platform creates a fluid and agile alternative to traditional data infrastructures. It is this agile network that will truly launch the Internet of Everything.

Thinfilm Sensor Labels

Thinfilm uses printing to manufacture simple integrated electronics at a fraction of the cost of conventional electronics, in highly scalable processes compatible with high-volume, low-cost markets. Thinfilm has integrated sensing, data storage, and display in a label format. Addition of a printed NFC interface will allow Thinfilm's Sensor Labels to link sensor data to apps on mobile devices and/or cloud-based analytics.

Future applications could include.

  • Temperature exposure of perishable goods, such as food and pharmaceuticals can be verified without heavy infrastructure
  • Disposable medical tests can be distributed to remote clinics and homes, with results communicated to medical records through the mobile device
  • Humidity can be detected in the walls of new construction, to monitor for leaks in pipes
  • Soldiers and pilots can be tested for 'readiness' based on bio-markers, allowing check-in before active service
  • Smart appliances can re-order supplies when an indicator says the product quantity is getting low
  • Patients can be monitored with one-time use devices for blood-oxygen levels, pulse readings, and other vital signs, and data gathered with the tap of a phone

Integration of Kovio technology accelerates time-to-market for NFC labels, and expands both Thinfilm's manufacturing capacity and intellectual property portfolio.

Unique marriage of technologies creates significant barriers to entry

"Printed transistor circuits are an important capability to enable truly smart devices but there are few companies in the world that have the know-how to produce these. Kovio is one of them," remarks Das.

Christer Karlsson, Thinfilm CTO explains, "The team here in San Jose can produce NFC Barcodes with well over 1500 active transistors, at pilot scale. Marrying the organic transistors we've been developing with the poly-silicon devices developed at Kovio establishes a formidable barrier-to-entry for future competitors."

The Kovio NFC Barcode(TM) is the only NFC interface in printed electronics and is supported commercially by Google Android and numerous NFC controllers being deployed in phones around the world. Thinfilm expects to demonstrate NFC-readable sensor labels by year-end.

Thinfilm NFC Innovation Center

"We are particularly excited to have more than 20 of the former Kovio team members joining to open the NFC Innovation Center. This core team will build out the Innovation Center's competence in design, process development and manufacturing," adds Karlsson. "The site at Zanker Road, San Jose, is deep in the heart of Silicon Valley, steps from the silicon industry's giants, an ideal location to recruit additional talent into Thinfilm and build the ecosystem."

Included in the acquisition:

  • Over 200 international patents and patents pending covering electronic inks, NFC and RF applications and protocols, process technologies, devices and circuits
  • Installed pilot manufacturing capacity of 100s of millions of units per year
  • 60,000 square foot manufacturing and development site
  • Kovio product lines in NFC and Electronic Article Surveillance
  • Encore software platform to support cloud-based data exchange

Broadening the Thinfilm portfolio

As part of the acquisition, Thinfilm has also acquired Kovio's technology for Electronic Article Surveillance (EAS) loss prevention tags. These solutions were developed in partnership with industry leaders such as Tyco Solutions and NedAp and complement Thinfilm's existing offerings in brand protection.

Thinfilm has also built a global team supporting the development of custom designs of integrated systems in ultra-low-cost electronics. According to Das, "Thinfilm is filling the need in the printed electronics industry by putting together complete solutions." Thinfilm will continue to pursue strategic partnerships, such as those it has with the Bemis Company, Brady Corporation, and Hasbro to accelerate the introduction of printed electronic systems into a wide range of markets.

"Thinfilm is the only company that is moving the needle when it comes to delivering printed electronics," said Randall Sherman, founder and president of New Venture Research.

Financial Terms

Thinfilm completed the acquisition of Kovio assets for a total of 2.7 USDm in cash and 1.0 USDm in equity, consisting of 1.0 million of Thinfilm shares, acquired by Kovio creditors at 5.92 NOK/share.

About Thin Film Electronics ASA

Thin Film Electronics ASA (Ticker: THIN.OL) is a leader in the development of Printed Electronics. The first to commercialize printed rewritable memory, Thinfilm is creating printed system products that will include memory, sensing, display and wireless communication-at a cost-per-functionality unmatched by any other electronic technology. Thinfilm's roadmap of system products integrates technology from a strong and growing ecosystem of partners to enable the Internet of Things by bringing intelligence to disposable goods. Company headquarters are in Oslo, Norway, with product development in Linköping, Sweden, sales offices in San Francisco, USA, and Tokyo, Japan, and manufacturing in Pyongtaek, South Korea.

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