A few years ago, a friend of mine bought 250,000 shares of International DisplayWorks (NASDAQ:IDWK) at roughly $0.75 per share. Now, with the stock at $7.37, he's a very happy camper. (No, there wasn't a reverse split.)

IDW is a manufacturer of high-quality liquid crystal displays (LCDs) and assemblies. Of course, success in this manufacturing-intensive business is all about scale. Currently, the company operates roughly 466,000 square feet of manufacturing capacity in China.

No doubt, the company is growing rapidly. This week, in its earnings announcement, IDW reported a 113% increase in revenues to $22.7 million for the second quarter. During this time, net income increased to $1.5 million, compared with a loss of $449,000 for the same period in 2004.

IDW focuses on devices with screens seven inches or smaller. It's a big market at roughly $11 billion, and it's still growing, especially with demand from the makers of cell phones and MP3 players.

Originally, IDW provided only monochrome displays. However, it now has a diverse offering, with products that include color displays and thin-film transistor (TFT) displays.

So, how much scale does the company have? Currently, IDW can generate $500 million in annual capacity. What's more, the company has built a lean corporate structure, with relatively fixed SG&A (sales, general, and administrative) expenses and low labor-unit costs. And the company has a strong customer base, including such biggies as Qualcomm (NASDAQ:QCOM), Sony (NYSE:SNY), and Flextronics (NASDAQ:FLEX).

With a strong product mix and capacity, it is easier to get new customers or persuade existing customers to purchase in greater volume. Companies want large quantities at competitive prices, as well as differentiating features (such as color or TFT). For example, in early May, IDW secured six initial orders for color displays with a cumulative value of $3 million.

Moreover, the company wants to use M&A to further its growth. This year, IDW purchased the manufacturing facility of Three Five Systems, which is based in Beijing, China. The division was losing money before IDW took over. Within three weeks, it was profitable.

Of course, there are risk factors. There could be disruptions in China. There could be quality mishaps. The company could lose a big customer. For a company of its size, any of the above could amount to a relatively large hiccup if it were to occur on a substantive basis, because IDW currently operates three manufacturing facilities. But so far, the company has had a laser focus on growth -- and it's working.

Now for the more important question: Does my friend still own his stock? Well, yes, he does. Keep in mind that my friend is a high-risk investor and is already deep in the money. But growth should continue in IDW's space, and it has put together a strong system to capitalize on it. Nevertheless, this is still an investment for those who are willing to take a flyer and withstand the potential for the dips associated with such an investment.

Fool contributor Tom Taulli does not own shares of any company mentioned in this article.