Background

In April 2019, Siris Capital Group, LLC acquired Electronics For Imaging (EFI). For those who don’t remember, EFI was founded by Efraim (Efi) Arazi, the former CEO of the Scitex Corporation. Arazi’s plan was to develop a relatively low-cost, easy-to-use system that would allow users to process and print high-quality graphics, including photo images, in a low-technology environment. Prior to the late 1980s, high-quality color processing and printing were done only on expensive computing equipment, like that developed by Scitex, and typically used by graphics professionals.

That was the genesis of the Fiery Color Server in 1991, and it was the key technology providing copier manufacturers a way to develop digital presses. Even today, the Fiery color server is the most widely used DFE (digital front end) for digital printing machines and enterprise MFP devices. After illness and his passing, the reins of EFI passed to Guy Gecht. This new leadership was responsible for expanding the company’s focus and size through organic growth and acquisitions, ultimately leading to the Siris acquisition for an estimated $1.7 billion.

After the acquisition, the company was divided into three main business units that reflected their core applications: EFI, which primarily focuses on industrial print applications and technologies; Productivity Software, which focuses on MIS/ERP solutions, which was subsequently sold to Symphony Technology Group in 2022; and Fiery, which focuses on front ends to process files and drive digital printers, which was just acquired by Seiko Epson.

Why Epson?

When the Fiery acquisition by Epson was announced, many were scratching their heads trying to understand the logic and synergies. Interestingly, Epson is not a direct licensee of Fiery for any of their printers, although some end users purchase Fiery DFEs to drive their Epson printers. Furthermore, Fiery licenses their DFEs to many of Epson’s competing printer manufacturers. So how does it all fit?

According to Toby Weiss, the CEO of Fiery, “Epson is a very successful inkjet head company, and they’re selling heads to people who build printers that overlap completely with what Epson does day in and day out. So they know how to manage those things. They know how to keep the firewalls up. They know how to keep independence. They know how to supply components in the industry. So in that sense, Fiery can remain as it is and intact, but backed by a company who believes a hundred percent in the transition of analog to digital print and has a shared mission and vision with us.”

In fact, Seiko Epson has three main business segments of focus: Printing Solutions, Visual Communications, and the Manufacturing-Related and Wearables Segment. In their first quarter financial statement, while they referenced some global challenges, they increased their outlook for inkjet printer and printhead sales. In fact, their Commercial and Industrial Inkjet Printing Hardware sales increased by 19.6% compared to the same period last year, and their outlook for this fiscal year projects a 13.4% increase year over year. They also saw a small increase in Wearable Products, although they believe that this is an area of future growth. In fact, at the drupa media days this year, Epson was highlighting their textile printing capabilities.

Printheads and Components

According to their financials, “Epson’s printing solutions business provides products and services based on original Micro Piezo inkjet technology to customers in the office, home, commercial, and industrial markets.” The company expects to see “sustained global demand for inkjet printers based on current growth in high-speed units for the office and on continued demand for high-capacity ink tank printers for the home and office in emerging markets and North America.”

More closely related to the acquisition, global demand for commercial and industrial inkjet printers is increasing along with a technology shift from analog to digital in sectors where the printing media is not paper, such as digital textile printing, décor, etc. Moreover, many commercial and industrial inkjet printers use Epson’s PrecisionCore MicroTFP printheads. These are critical components that determine the image quality and speed of an inkjet printer. These printheads can be flexibly adapted for different applications by assembling MicroTFP print chips in various combinations. Epson expects further growth in the use of PrecisionCore printheads in commercial and industrial printers as well as in inkjet multifunction printers with high-speed line heads.

Epson is so sure of the sector growth, this year they started construction of a new ¥5.1 billion (~$35 million) inkjet printhead manufacturing facility. I would assume that they thus believe that each of the production inkjet printers that they—or many of the other global printer manufacturers—will develop that use Epson or other manufacturers’ printheads will need a DFE to drive the printer.

This Sort of Makes Sense

So, the acquisition is not a result of a new Epson printer, and in fact it wouldn’t be enough to warrant the price paid for Fiery. The acquisition does make sense when you look at the expansion and growth rate of inkjet. According to research by Future Market Insights, “For 2024, the net value of total industrial printers adopted across all countries is likely to be pegged at US$15,697.8 million. According to our global printer market analysis report, the worldwide demand is poised to grow at a rate of 5.5% till 2034. The report predicts the overall market value to reach almost US$26,814.1 million by the end of the forecast period.” 

The global Piezo Inkjet Printhead market size is valued at over US$1 billion and is projected with a CAGR of 5.9%. The five largest global manufacturers of piezo inkjet printheads are Epson, SII Printek, Xaar, Ricoh, and Fujifilm Dimatix, which make up over 60% of the printhead market. Among them, Epson dominates with nearly 25% production value share. Accordingly, it may all trickle down to the print service providers. Smithers projects that “2024 global sales from inkjet printing will reach $117.7 billion, with an increased growth rate of 6.6% (CAGR) by 2029.”

In Closing

After doing some digging, this acquisition does make some sense. It doesn’t mean now that Epson acquired Fiery that all industrial printer manufacturers will shift their DFEs to Fiery, but it will undoubtedly help support increased development of the Fiery solutions to address the expansion of inkjet printing technologies.

As for the Fiery team, according to Weiss, “We’re international, so we have people all over the place. The team is very excited it is staying together. I’m staying on board to lead the organization. The management team is staying on board, as are all the brilliant scientists and salespeople that have been supporting our dealers and our partners will be the same people.”

More to Come…

I would like to address your interests and concerns in future articles as it relates to production inkjet and the manufacturing of Print, Packaging, and Labels, and how, if at all, it drives future workflows including “Industry 4.0.” If you have any interesting examples of hybrid and bespoke manufacturing, I am very anxious to hear about them. Please feel free to contact me at [email protected] with any questions, suggestions, or examples of interesting applications.