The high demand for e-readers culminated not too long ago with Amazon's Kindle e-reader topping monthly sales records, even though only the first half of December had passed. Taking note of this, and of the fact that demand is high enough for Barnes and Noble to be unable to honor orders on time, LG decided to step into the fray. The company signed deals with e-paper technology developers and plans to start work on its own products.

E-paper displays are different from other liquid crystal displays (LCD) in the way that they are much easier on the eyes because they have no internal light source. LG display signed deals with subsidiaries of Prime View International, which also provides the main display element in the aforementioned Kindle e-reader and even Sony's device. The manufacturer will receive e-paper from E Ink while working with Hydis on future e-paper display modules. LG will also spend $30.5m on Hydis bonds. Finally, as far as PVI is concerned, LG already holds a 0.5% stake in it after it invested $10m earlier this month.

”PVI is a leading player in the e-paper market, which is a promising future business. So we want to expand co-operation with them in terms of future technology,” said an LG spokesman.

The agreement between PVI and the Korean company will break the strong hold that AU Optronics and Chi Mei Optoelectronics have had so far over the e-paper display mass production segment. Both have been a strong presence in the e-reader industry after respectively signing agreements with SiPix imaging (rival to E Ink) and PVI.

“The deal will allow us to strengthen our competitiveness in the e-paper business and reinforce our future growth framework at the same time,” said Kwon Young-soo, LG Display’s President.

The deal will also allow PVI, which currently holds about two thirds of the market for e-paper displays, to handle the growing competition presented by Sipix and Bridgestone. In addition, the pact also sets the stage for researching new e-paper displays, perhaps even finding a remedy for the fact that they are currently incapable of color.

LG hasn't clearly stated whether it will ever start to produce its own e-readers, but it is obvious that it will, at the very least, start making displays for such devices.