Seiko Instruments and Varioptic Lyon announced today the signature of a cooperation agreement to develop, manufacture and market Varioptic's Liquid Lens products. The aim of this agreement is to achieve a significant penetration with Liquid Lens products in the fast growing camera module market and other large volume end equipment markets such as barcodes and webcams.

SII production capacity plan is expected to reach 0.5 million units per month by 3Q of 2008 and will expand mass production capacity according to market needs. This agreement builds on an existing production capacity for Arctic 314 and Arctic 416 liquid lenses designed for 5 Megapixel, 1/3" and 1/4'' format camera modules.

Varioptic's liquid lens feature many advantages over competing technologies in terms of cost, size, robustness, power consumption, silent operation and speed. These advantages position liquid lenses particularly well for the emerging camcorder phone market where continuous auto-focus for video is a "must-have" feature.