In an important acquisition, Oslo, Norway-based Thin Film Electronics ASA (Thinfilm) acquired Kovio’s technology, intellectual property and manufacturing assets. The acquisition includes more than 250 international patents and patents pending covering electronic inks, NFC and RF applications and protocols, process technologies, devices and circuits, as well as pilot manufacturing capacity of hundreds of millions of units per year at Kovio’s 60,000 square foot manufacturing and development facility in San Jose, CA.

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

Thinfilm has built up a wide range of applications in the field of printed electronics (PE), most notably a collaboration the Bemis Company for smart labels. Kovio had made inroads into PE as well, designing and manufacturing printed silicon products such as near field communication (NFC) Barcodes and its Electronic Article Surveillance loss prevention tags, developed in partnership with Tyco Solutions and Nedap Retail, among other retailers.

According to Thinfilm, the company anticipates manufacturing NFC-readable sensor labels in 2014, including memory and RF communication capabilities, for less than $1 per tag. This will be a key step in enabling the Internet of Things (IOT), a potential multi-trillion dollar market.

Thinfilm has built up its smart label operations, working with a number of partners – including PARC, Acreo, Polyera, Solvay, Inktec, PST Sensors and Imprint Energy – to manufactures labels through printing, which reduces costs and is very scalable. By adding Kovio’s printed NFC interface, Thinfilm’s Sensor Labels will be able to link sensor data to apps on mobile devices and cloud-based analytics. Target markets include temperature sensors for food and pharmaceuticals, disposable medical testing devices, humidity and environmental sensors, smart appliances and military applications.

Dr. Davor Sutija said that Thinfilm had been watching Kovio’s technology for some time, and adding NFC to Thinfilm’s printed electronic memory and sensor platform will allow the seamless exchange of information between Thinfilm’s Smart Labels and NFC-enabled phones and tablets.

“Thinfilm’s Smart Label platform, to be released later this year, can collect and display sensor data at price point 1/10th to 1/100th the cost of conventional electronic systems,” Dr. Sutija said. “The addition of NFC communication will allow such data to be read and utilized by applications on the smart phone and in the network. The Kovio NFC protocol is currently supported by the Google Android platform and is compatible with most major NFC controllers. We anticipate that full integration with the technology will be complete within the year..”

As a result of the acquisition, the company will open the Thinfilm NFC Innovation Center in San Jose, CA. The NFC Innovation Center will offer pilot production and research capabilities. Thinfilm anticipates that more than 20 Kovio employees will stay on at the new center. Dr. Sutija said that the purchase of the Kovio manufacturing plant significantly accelerates the Thinfilm roadmap for RF-enabled systems.

“The chips are large enough to be handled easily in a roll-to-roll assembly process, and the substrate is inexpensive enough to allow large pad areas for connecting,” he added. “By bringing in both the technology and the former Kovio team, we will be able to bring industry-standard NFC-compatible systems to market far sooner.” Thinflm will continue to support Kovio’s NFC products for existing customers.

Dr. Sutija anticipates that the acquisition of Kovio will provide Thinfilm with more ways to support its customers’ needs.

“What’s important to remember is that with this deal, we are acquiring more than 260 patents and a huge know-how that has been developed over a decade,” Dr. Sutija concluded. “This, combined with our investment in R&D and patents from PARC, means we now have two options for logic technology that will allow us to make small devices to mount on roll-to-roll manufactured smart labels, and Kovio has demonstrated that they can inexpensively attach NFC circuits. In fact, it is the lowest cost NFC on the market because of the manufacturing technology and assembly process.”