The liquid crystals used in the digital displays of watches and hand-held calculators move at speeds measured in tenths of seconds. By increasing that speed to 1/100,000 of a second, physicist James L. Fergason figures his company can tap into what he estimates will be a $75-million market for flat panel computer displays.

Fergason's six-year-old company, American Liquid Xtal Chemical Corp., based in Kent, Ohio, develops new technology for liquid crystal applications.The latest innovation, called "surface mode," dramatically accelerates the speed of liquid crystals in digital displays. Included in that category are the flat panel displays that are likely to replace the cathode ray tube in video and computer applications in the 1980s.

Fergason plans to keep his firm in the high-margin and low-volume custom design end of the market, concentrating on military and commercial applications. Surface mode could be used to bring liquid crystals into use for pocket-sized television sets, but Fergason is forsaking that market because he believes there will be a lack of demand. "In flat panel displays," he explains, "there is market pull. You know that portable computer terminals are salable -- and the lighter the terminal the better."

The firm has shipped $200,000 worth of surface mode products so far, mostly engineering prototypes to companies such as Emerson Electric, Allen-Bradley, and Westinghouse Electric.

But future surface mode revenues could soar. "Our plans call for an $8-million penetration of the market by 1985," Fergason says, "and we could do better than that."