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Canon to acquire Canadian chipmaker Redlen for $270m

Japanese company boosts efforts to develop reduced-radiation CT scanners

Redlen uses its own chips in equipment that directly converts radiation into electrical signals, technology that is crucial to Canon's ambitions in the CT scanner market. (Source photos by Reuters and screenshot from Redlen Technologies' website) 

TOKYO -- Canon will acquire Canadian chipmaker Redlen Technologies for around 30 billion yen ($270 million), a move that will enable it to develop the chips that power a new generation of CT scanners as it shifts its focus away from cameras and office equipment.

Canon is developing CT scanners that reduce radiation exposure to one-tenth by leveraging Redlen technology that efficiently detects X-rays.

Redlen Technologies, created in 1999, currently employs around 200. It does not disclose its annual sales. Canon has a 15% stake in the Canadian company and appears to have agreed with other shareholders to buy the remaining 85%.

The acquisition is expected to be completed this fall.

When a CT scan is taken, the human body is irradiated with X-rays. Images are captured by detecting the number of X-rays that pass through each part of the body.

Redlen is developing photon-counting detector technology using its own chips. The technology directly converts radiation into electrical signals. This allows for reduced radiation exposure during a scan.

Canon also aims to leverage its own image processing technology to reduce the amount of radiation exposure to one-tenth the current level. It intends to start clinical research in collaboration with Japan's National Cancer Center as early as next year and is looking to commercialize the new generation CT scanners by 2025 and sell them at the same price as its current products.

Developing new CT scanners is part of Canon's strategy to make medical equipment its main revenue pillar, shifting away from cameras and office equipment.

Canon currently controls around 20% of the global CT scanner market but hopes to expand on this by taking its reduced-radiation equipment and going head to head with industry leaders such as General Electric and Siemens.

In fiscal 2020, Canon's medical businesses accounted for around 430 billion yen of the company's total consolidated sales of 3.16 trillion yen. Canon intends to raise medical's contribution to 600 billion yen in the next five years.

Redlen's detectors that directly convert radiation into electrical signals differ from other detectors that convert radiation into light before converting it into electric signals, a process prone to information loss.

Usually, CT scanners produce black and white images. Canon's new scanner promises more detailed, color images. Among other benefits, this could make it easier for a doctor who is trying to determine which organ is bleeding.

Canon says its scanners will also make it easier to determine if a tumor is cancerous.

It plans to supply the core parts of the CT scanner to other companies. It will differentiate its scanners with image processing technology and software.

In medical imaging, CT scanners also face competition from MRI equipment, which uses magnetic force and radio waves to take images of brains. Although MRI equipment is more expensive than CT scanners, it is superior in a number of ways. It does not expose patients to radiation and it provides more accurate images than CT scanners.

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