Panphonics' proprietary technology is based on the electro-mechanical film (EMFi) concept, which was invented and patented by Kari Kirjavainen, a renowned Finnish inventor. The initial technology study was done together with VTT, the Technical Research Centre of Finland during the early 1990s with governmental funding from TEKES, the Finnish National Technology Agency. The Company itself was founded in 1997.

Panphonics was established to fully develop and commercialize the patented technology to be used as components for audio applications. During the first five years of operation, the Company was in stealth mode and focused on R&D only. In March 2003 test marketing for the first generation of the Panphonics product started with first customers on the domestic market.

The Company's headquarters, including sales and marketing, are located in Espoo (in the Helsinki metropolitan area), while its R&D and production facility, with its custom-built manufacturing machinery, is located about 150 km north of it in Tampere.

The Company is owned by institutional investors Eqvitec Partners, a Nordic venture capital company , and Sitra, the Finnish National Fund for Research and Development, as well as by Finnish private individuals and the company management.