LG Display, the world's second biggest flat-screen maker, has joined the rush among Asian manufacturers to make e-paper displays – the flat screens used in the fast-growing electronic reader market.

The South Korean company yesterday signed deals with two subsidiaries of Taiwan's Prime View International, which supplies the key display component for electronic readers such as Amazon's Kindle and Sony's Reader. E Ink, which is based in Massachusetts, will supply e-paper to LG Display, while flat-panel maker Hydis Technology will work with the South Korean company to develop future e-paper display modules.

The two sides will purchase products from each other and LG Display will also buy $30.5m of bonds issued by Hydis as part of the agreement. LG Display has this month invested $10m for a 0.5 per cent stake in PVI.