Zalman Tech seeks future in 3-D display

Founded in 1999, Zalman Tech Co. is a relatively young company. However, Zalman is already a well known name for computer coolers and accessories among computer enthusiasts. Until recently the company held the largest share of the world`s retail market for computer coolers with its innovative Flower Heat Sink coolers.

Although the company has been pushed off the top of the cooler market, Zalman is now looking to open up new horizons with three-dimensional displays.

"Zalman`s principle is to develop products the consumers need before everyone else," Zalman chief executive Lee Young-pil said. He added that the company developed quieter coolers 10 years ago, when manufacturers paid little attention to noise levels, and secured leadership in the market.



"3D technology is the same. We began investing in the area three years ago when there was no market to speak of, but now we are one of only two companies in the world with related technology."

Although Zalman`s 3D display business is still in an early stage, the company has already seen some results.

In November it began shipping 3D monitors to Japan in collaboration with Fuji Film, which markets cameras that take 3D pictures. Zalman is also negotiating to supply polarizing filters to a major international computer manufacturer.

"We will also go into other 3D products such as 3D film for projectors and cameras, but as things stand, we can`t do all of these things," Lee said.

"3D content is another related field, and since we can`t develop such things ourselves, we invested in a 3D content developer -- Real Scope, of which we hold 11 percent."

The company is also in talks with investors to raise funds for facilities for producing larger polarizing films.

"Our existing facilities can only produce up to 32-inch 3D filters, and we are in talks with investors to generate the funds necessary to go bigger," Lee said.

"However, the process will take time since it would require about 30 billion won, and that kind of investment needs a level of confidence in the market."

Lee, who is also a patent lawyer, places particular emphasis on securing competitiveness through innovations and says that such a principle also applies to small and medium enterprises in general.

"We are not good at securing competitiveness by reducing production costs and other similar means. Instead, we try to secure leadership through new technologies," Lee said.

"The Korean economy is centered on large corporations. This is good and we should further develop the advantages of such a system but small and medium sized enterprises that have their own brand and technology need to be developed," Lee said. He added that Germany, which has held on to the title of the world`s largest exporter for some time, has around has 1,500 small companies with their own brands.

Concerning the sharp dip in profits seen during the third quarter, a 1.65 billion won operating loss, Lee said that much of the losses were caused by the company selling off backlog monitors to make way for new products. He added that since such processes with potentially negative effects have been cleared out of the way, the company is now better prepared for the future.

Although not as dramatic, the company`s profit structure was hard hit last year with operating profits falling to 2.9 billion won from 7.3 trillion won recorded in 2007.

Along with profits, Zalman`s share prices have also been on a rollercoaster ride over the recent months.

In February, Zalman`s shares went as low as 1,495 won but then soon climbed back up to move about in the 3,000 won to 4,000 won ranges. Share prices again fell to 2,700 in mid November. Since then prices have more than doubled.

"When share prices fell, the company had suffered significant losses due to KIKO, and the sales environment was affected by the global financial crisis, causing investors to have doubts about the company`s future," Lee said.

"We no longer have liquidity problems and the sales environment has improved. And once the 3D business takes off, so will share prices."

(cheesuk@heraldm.com)







By Choi He-suk