Imax Signs Texas Instruments For Digital Projectors

March 18, 2008

Source: Texas Instruments DLP Cinema

Imax Corp. (IMAX) will use Texas Instruments Inc.'s ( TXN) DLP Cinema technology in its forthcoming digital-projection system, the companies confirmed Tuesday.

Brad Wechsler, co-Chief Executive of Imax, said the agreement bolsters the company's ability to meet its digital-theater deployment plans for this year. " We're totally comfortable with the reliability, durability, and the number of systems that we need," he told Dow Jones.

Imax, known for its giant film screens, is in the midst of a transition to digital from its bulky analog projectors. It plans to install its first three digital systems by the end of June, plus another three the following month. A broader rollout is scheduled to begin toward the end of the third quarter.

Financial terms of the deal weren't disclosed.

The Imax digital system, which has been demonstrated at a theater outside Toronto, has already generated a 100-theater deal with U.S. exhibitor AMC Entertainment, and this week, Imax announced a 35-theater deal with South American developer Racimec International Group.

"(Texas Instruments is) associating with the Rolls Royce of image delivery and we're associating with what we believe to be the best underlying technology that's out there today," Wechsler explained, adding that there will be opportunities for cross-marketing. For instance, some marketing materials will refer to Imax digital as being "powered" by DLP Cinema, he explained.

Imax's digital projector is composed of two digital light engines that are linked by the company's proprietary image enhancer. It's the two technologies combined that will deliver the superior image quality audiences expect of the Imax brand, Wechsler said.

While Imax had initially said it would be working with digital projectors supplied by Sony Corp. (SNE), Wechsler said that, after a year of research, Imax decided Texas Instruments had the technology that met its needs.

Digital is seen as a key driver for Imax, as it will dramatically reduce the costs associated with its large-format film technology. Another opportunity that digital allows is alternative content, such as live events broadcast in theaters in 3-D.

Nancy Fares, business manager for DLP Cinema Products Group, said Texas Instruments' relationship with Imax goes back many years. "They have evaluated the competitive technology and it just doesn't work for them," she said.

Imax may not have a huge number of screens, but being a pioneer in digital cinema, the announcement means a lot to Texas Instruments nevertheless, she said. There are 6,000 DLP systems installed worldwide, about 1,200 of which are capable of showing 3D.

"They have a great brand and they are the premium experience in the movie theaters," Fares said. "It's icing on the cake for us."

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