"You have an entire generation that is starting out with touch smartphones and tablets," he said.
Just 2.5 percent of notebooks sold last year were touch- enabled, and that figure that will rise to only 13.1 percent this year, even with the introduction of Windows 8, NPD DisplaySearch predicts.
"Consumers don't see why they should pay a premium for a feature that's already part of their smartphones and tablets," said Richard Shim, an analyst at NPD DisplaySearch.
Almost all of the screens in iPhones, iPads and touch- enabled devices use ITO, a byproduct of zinc production. A so- called rare-earth material, most of ITO comes from China.
Japan's Nitto Denko Corp. is the biggest maker of ITO-based touch sensors, and counts Samsung Electronics Co. and Apple among its top customers, according to data compiled by Bloomberg. Kazuhito Kouno, a spokesman at Osaka, Japan-based Nitto Denko, declined to comment.
Atmel, based in San Jose, California, is already shipping the new sensors for use in an Asustek Computer Inc. tablet, according to Brett Gaines, senior director for business development of Atmel's XSense business.
In addition to being cheaper and giving more accurate readings of where a device is being touched, copper-based technology opens the door to curved and even flexible displays. Unlike screens with ITO, which breaks easily, metal-based panels can bend, Gaines said. Samsung Electronics and Apple, which together supply more than half of the smartphone market, dominate demand for ITO supply, soaking up more than half of the industry's output, he said.
"There clearly is a drive, especially in larger screens, to find a replacement to ITO," said Gaines. "Cost is one of those reasons. PC players are seeing that touch is a driver, especially in the face the onslaught of tablets."
Uni-Pixel has created a process that prints and plates a copper grid onto rolls of plastic, avoiding the multistep semiconductor-type manufacturing for ITO-based touch screens.
Based in Woodlands, Texas, Uni-Pixel, which has never posted more than $200,000 in quarterly revenue, believes it has a chance to help the $223.3 billion PC industry directly by entering production, even though it has fewer than 50 employees, according to Chief Executive Officer Reed Killion.
Uni-Pixel shares have almost tripled since Dec. 7, when it announced it had signed up a large PC maker. The company is being paid cash upfront to set up dedicated production lines. Dell is the company working with Uni-Pixel, according to Acree.
Ellen Murphy, a spokeswoman for Dell, declined to comment.
"One of the advantages we've had is that we've gone relatively unnoticed," Killion said. "Nobody thought 20 guys and mule in Texas could deliver to scale."