Maker of flat-panel displays seeks profit in troubled times

October 17, 2001

Crunch time may be a good time for Advan International. The Fremont, CA, company believes the medical industry will soon come under increased pressure to turn a profit, allocate more space in hospitals for equipment, and cope with government regulation

Crunch time may be a good time for Advan International. The Fremont, CA, company believes the medical industry will soon come under increased pressure to turn a profit, allocate more space in hospitals for equipment, and cope with government regulation and oversight. Under these conditions suppliers can make a difference, especially if they are flexible and have the right technology, according to Advan director of sales and marketing, Mark Lutvak.

Advan is trying to provide exactly that. The company, which was founded in 1982 as a supplier of semiconductors, shifted focus four years ago to concentrate on flat-panel display products. Since then, it has evolved into a major supplier to the medical market of TFT/LCD (thin film transistor/liquid crystal display) monitors, selling them into several market segments including PACS, diagnostic ultrasound, nuclear medicine, cath lab, and digital radiography. Its flat-panel displays are designed specifically for the medical industry and feature monitors with diagonal sizes up to 23 inches.

While the company may sell directly to end users, it has been emphasizing OEM sales. Among Advan’s clients are Agilent Health Systems Group, now part of Philips Medical Systems, TeraRecon, and Canon Medical. All three label Advan technology under their own names.

“Advan is one of the few suppliers that private label (flat-panel displays) for medical OEMs,” Lutvak said. “Most refuse to private label.”

There’s more to the private branding than just a name, he said. Advan customizes the products, when necessary, modifying their designs to meet OEM specifications. An example is the design of new controller boards to allow real-time patient monitoring, fast response, and high brightness for hospital central information center/bedside patient monitoring, cardiology, PACS, and ultrasound applications. Another is the inclusion of touchscreen technology and USB ports to make flat-panel monitors compatible with OEM equipment that relies on touch applications to relieve hospital workplace clutter and that use USB ports rather than serial system ports.

Modifying flat-panel designs is akin to greasing the skids of a technology that’s set to take off in the medical industry, according to Lutvak. It allows these products to slide right into the likely future of medical practice. Flat-panel displays are inherently appealing in that they don’t take up much space in an increasingly crowded environment, he noted. New regulations, such as those surrounding HIPAA (the Health Insurance Portability and Accountability Act of 1996), call for oversight of medical information systems, necessitating monitoring of system operations. The appeal of flat panels for such installations is amplified by the falling prices of electronics, a trend that today makes TFT/LCD monitors very cost-competitive with CRT-based monitors.

Ironically, this trend toward declining costs was the primary reason Advan entered the medical industry. The company needed to broaden its markets to compensate for steadily eroding prices for semiconductors and tighter sales margins.

“Advan continues to participate in the semiconductor market, but medical markets are the main thrust of our business,” Lutvak said.

The competition is no less challenging in Advan’s newly adopted markets, he said. But the company has developed measures that optimize the R&D of products, as well as their support. Company engineers collaborate with TFT/LCD glass-panel suppliers in Japan, Korea, and Taiwan, while developing electronic components in partnership with a range of high-tech manufacturers, many of which are based in the U.S. On the service side, Advan has established a round-the-clock support line for end users to serve customers worldwide. These steps reflect the company’s fundamental philosophy.

“We have to make it easy for our clients to do business with us,” Lutvak said.