MicroVision Downgrades Potential Pioneer MEMS Display Re-orders

Pioneer was a key revenue driver for MicroVision last year when it introduced the Cyber Navi AVIC-VH99HUD single-DIN and AVIC-ZH99HUD dual-DIN after-market HUD devices using the company’s MEMS display as part of a GPS system paired with NTT DoCoMo’s wireless service and data. But Pioneer underwent a major restructuring, with a $191.8 million annual net loss in the fiscal year ended March 31, Pioneer said (CED May 14 p2). Pioneer’s car electronics segment also had a $31.3 million net loss in the quarter ended June 30 amid a decrease in consumer car navigation system sales, largely in Japan, where the Cyber Navi products also were sold.

The restructuring “distracted” Pioneer from “focusing attention on new products,” Tokman said. “Given that activity we reduced our expectations for a significant re-order for the after-market head up displays,” Tokman said. But MicroVision is in discussions with Pioneer on developing embedded MEMS-based head-up displays, a concept that also has drawn interest from “tier one” automakers, Tokman said. MicroVision fulfilled its Pioneer order through Q2 for 1.37 x 0.78 x 0.24-inch second-generation PicoP light engines that delivered 1,280 x 720 resolution, 15 lumens to 25 lumens and 3:1 contrast ratio, Tokman said.

Pioneer placed $5.4 million in orders for the MEMS displays last year, including a $1.4 million re-order last July (CED Nov 6 p3). MicroVision logged $83,000 in royalty revenue in Q3 ended Sept. 30 as Pioneer sold “several thousand” of the Cyber Navi devices (CED Nov 6 p3). The decline in Pioneer business has been partly offset by MicroVision’s April 13-month, $4.6 million development pact with an unidentified CE company that has made “solid progress” so far, Tokman said. MicroVision has been “working side-by-side” with the CE company in building its MEMS technology into a display engine and a “preliminary road map” has been set for a range of products, likely starting with accessories, Tokman said. “We are very pleased” with the CE vendor’s “approach and level of engagement,” Tokman said. MicroVision is aiming to secure a commercial pact with the CE firm by year-end, he said. MicroVision ended Q2 with $3.8 million in back orders, including $3.4 million with the CE company, Chief Financial Officer Stephen Holt said.

MicroVision remains in discussions with “top-five” potential partners, including CE companies and one or two tier-one automakers in hopes of landing a new design win by year-end, Tokman said. “The timing is very difficult” and there have been “a couple of shifts” in the composition of the top-five potential partners, Tokman said. MicroVision is seeking a “stake in the ground” and a “commitment” from a partner that is “tangible to us” and includes licensing revenue and an upfront fee, Tokman said. “If we don’t feel we are getting our fair share, we try to correct it,” he said. MicroVision shifted its focus to OEM and away from branded pico front projectors last year as it shipped development kits to 50 firms that expressed interest (CED April 30 p2). By November, it had narrowed the field, shipping samples of its MEMS-based light engines to 20 automotive and CE companies.

The company also is seeking to broaden its base of suppliers for components that go into the display engine. Intersil, STMicroelectronics and Toshiba have been among those that provided ASIC processors in the past. Nichia and Osram have supplied direct-green lasers that are keys to the displays. Sony also is working with Sumitomo on developing direct-green lasers. Walsin Lihwa subsidiary Touch Micro-system Technology has made MicroVision’s MEMS chips in the past.

Meanwhile, MicroVision’s Q2 net loss narrowed to $3.4 million from $4.9 million a year earlier as total operating expenses dropped to $4.4 million from $6.2 million, the company said. The Q2 gross margin narrowed to $1 million from $1.3 million a year ago, the company said. MicroVision’s revenue rose to $1.87 million from $1.29 million as product sales rose to $917,000 from $750,000, the company said. MicroVision also had $880,000 in development revenue, which stemmed from the agreement with the new CE partner and helped offset a decline in contract sales to $73,000 from $545,000, the company said.