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Google Glass Eyes Sky-High Supply: At Least 2 Million Units Annually

Internet giant takes stake in Taiwan's Himax Display, which makes microdisplays for head-mounted devices

Google has taken a stake in Himax Display, which produces microdisplays for head-mounted devices including Google Glass — indicating the Internet giant expects to ramp up production to more than 2 million units per year, according one Wall Street analyst.

Google has agreed to invest in the company, a subsidiary of Taiwan-based Himax Technologies, to fund production upgrades, expand capacity and enhance production capabilities for liquid crystal on silicon (LCOS) chips and modules used in applications including head-mounted displays like Google Glass. Under the pact, Google will purchase a 6.3% interest in Himax Display, with the option to increase its stake to up to 14.8%.

Google Glass includes has a small screen embedded in the right lens and lets users search the web, watch video, pull up maps, read text messages, take photos, and execute other functions. Some predict head-mounted computing will be a game-changer, while at the same time the Google Glass project has been widely mocked as making users look silly and also has stoked fears about invasions of privacy.

SEE ALSO: Special Report on Google: YouTube, Glass, Fiber & More

The Google investment in Himax Display “signifies that Google intends to prepare for more than 2 million units of annual Glass production,” and that the company’s previous 2 million limit “was not viewed as sufficient to Google,” Mark Gomes of PoisedtoTriple Research wrote in a blog post. He suggested the Taiwan-based manufacturer is boosting production capacity to 7 million LCOS microdisplays annually.

In a statement, Google rep said, “Himax Display has been a great partner for several years now. This investment is an extension of this partnership, which we hope will allow the team to continue to develop their operations.”

Himax said it began expanding LCOS production capacity beginning in the second quarter of 2013. “This investment from Google further validates our commitment to developing breakthrough technologies and state-of-the-art production facilities,”  Himax prexy and CEO Jordan Wu said in announcing the deal. “We look forward to leveraging this investment and our collective expertise with Google to create unique and transformational LCOS technologies for many years ahead.”

Himax Technologies holds 81.5% of Himax Display and will remain the major shareholder after the Google transaction. Other investors in Himax Display include Intel Capital, KPCB Holdings and Khosla Ventures.

Himax said the Google transaction is expected to close in the third quarter of 2013, subject to regulatory approvals and other closing conditions.

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