Canon decided on Tuesday to liquidate a subsidiary developing a flat-panel display technology called SED, effectively bringing to an end once high hopes that the screens would replace LCD panels and plasma displays in living room TVs.

Development of SED (surface-condition electron-emitter display) screens began in 1986 at Canon and was joined in 1999 by Toshiba.

SEDs combine elements of both CRT (cathode ray tube) and LCD (liquid crystal display) technologies. As with CRTs, electrons hit a phosphor-coated screen to emit light. But instead of being shot from an electron gun, electrons are drawn out of an emitter through a slit that is only a few nanometers wide. The result is a picture that is as bright as a CRT and does not suffer a time lag sometimes seen on LCD panels with rapidly moving images.

In addition to the superior picture, the panels also consumed half the power or less of competing screens of the time, so both companies expected success. In 2004 they established SED Inc. to commercialize the technology.

So confident was Toshiba that it began running down its plasma TV operations in preparation for a full-scale launch of SED. By 2010, the company said at the time, it was expecting to command a third of the global market for 40-inch or larger TVs.

A US$1.7 billion investment followed in a factory and screens were promised in 2005, but they never came. Citing difficulties getting down production costs, the companies delayed the launch of SED until 2007.

Canon and Toshiba had been caught off guard by fast growth and subsequent price competition in the flat-panel TV market. As companies rushed to grab market share they cut prices and that made it difficult for SED to compete.

As SED worked on bringing down costs it was hit with another problem.

Ownership of the venture was split with Canon holding the slightly larger share of 50 percent plus one share. In Canon's eyes that made it a subsidiary, but Nano Proprietary, a Texas-based company, disagreed. Nano Proprietary had licensed some of the technology used in SED to Canon and its subsidiaries, but hit the joint venture with a lawsuit arguing that Toshiba retained decision-making powers and so SED wasn't a true subsidiary.

Toshiba quickly sold its stake in the company to Canon and the lawsuit was eventually settled, but SED's commercial chances had been hit again.

In 2007, Canon said it would further delay commercialization as it sought to bring down production costs. It was to be the last announcement on the technology until this week, when Canon said it would bring development back to its central labs.

Work is expected to continue on SED for use in specialist displays but its days as a living-room technology appear over.

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com