Nanoco signs 'game changing' quantum dots deal with Merck

Nanoco has agreed a non-exclusive licence with Merck for the German chemicals giant to immediately begin marketing the UK minnow's products as part of its display screens offering for LCD TVs and smartphones.

The material supply and licensing agreement will allow Merck to immediately start marketing Nanoco’s cadmium-free quantum dots, which are a relatively new technology used in LCD display screens, and to ultimately establish its own production facility as demand builds.

Although the financial details of the agreement were not disclosed, Nanoco said it will receive a licence fee and royalties on Merck’s sales of the Nanoco cadmium-free quantum dots Merck manufactures.

Merck will begin marketing Nanoco’s technology in the near term by selling cadmium-free quantum dots manufactured at Nanoco’s expanded production plant in Runcorn, UK, before establishing its own production facility at a later point in time, depending on global market demand.

Nanoco previously agreed a similar deal with Dow Chemical, which took around 18 months to reach productive capacity, but house broker Canaccord said management expects Merck to achieve this on a shorter timescale given recent advances and experience in technology transfer.

Nanoco chief executive Michael Edelman said the agreement was "another major endorsement of the world-class quality of our cadmium free quantum dot technology".

Notably, Merck's chief of Performance Materials said cadmium-free quantum dots "enable a remarkable increase in the colour range and a significant reduction in power consumption can be achieved".

He said Merck was signing the deal to enable it to "sustainably secure its position as the global market and technology leader in display materials".

Analysts at Canaccord noted that Nanoco's existing non-exclusive deal with Dow was focused predominantly on the Korean market and Monday's agreement was a "game changing deal".

"Today's deal not only provides a second source of supply into the important Korean market (Samsung and LG) but also opens up the potential for global supply, including the whole of the Far East where Merck already has extensive sales and distribution capability."