LED Lighting’s Big Expansion

September 21, 2010

There is no shortage of emerging competition in LED lighting. Capacity is rising, prices are falling and some of the world’s biggest chipmakers appear ready to do battle.

This week LED kahuna Cree promised to spend $135 million expanding production at its North Carolina fab. It earmarked another $392 million for a new facility in the state and is said to be considering facilities in the low-cost labor markets of China and Malaysia.

Inside Bridgelux's new Silicon Valley fab

General Electric is ramping up its own production, as is Samsung, LG Electronics, Philips and Osram.  In China, about 55 producers are pumping money (some of its state funds) into their own plants.

Even India wants to get in on the act. De Core Science and Technologies is said to be gearing up for LED production at as many as two locations

Don’t forget Bridgelux, a promising U.S. producer that on Monday showed off a Silicon Valley fab where it has big plans for expansion. The company has the capacity to make 5,000 wafers a month and hopes to expand that five fold. About 180 new workers are expected by next year.

The growth should enable Bridgelux to more than double revenue next year from this year’s $30 million, says CEO Bill Watkins.

The industry’s expansion has an obvious motivation. Some estimates suggest a $19 billion worldwide market for LED lighting by 2014. There is big money to be made.

But with the steady expansion around the world, the danger of over capacity and commoditization rises as well.

Clean-room workers in the Bridgelux plant

The excitement of a massive LED market has attracted growing enthusiasm from venture capitalists. Money has poured into companies across the market spectrum, from software makers to hardware designers, including Luminus Devices, Superbulbs, Terralux, Digital Lumens, Albeo, LEDEngin. Bridgelux itself has raised $113.5 million.

There will be more to come.

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Posted by Mark Boslet

Digital Lumens Unveils First Customer With Claim Of 87% Energy Savings

August 26, 2010

Digital Lumens notched its first publicly announced customer win this week with the claim of an 87 percent reduction in lighting energy consumption.

Maines Paper & Food Service, a New York supplier to the restaurant industry, says it installed a Digital Lumens lighting system at its Conklin headquarters in June. It anticipates saving 1.7 million kilowatt hours of electricity a year.

The public proof-point should be a boost for the Boston designer of LED fixtures that rely on wireless networking and management software to more efficiently use energy. Dozens of other customers are in commercial deployment, says CEO Tom Pincince, just not publicly announced.

Maines says it is using 484 Digital Lumens fixtures in a 460,000-square-foot warehouse. The company is taking advantage of New York State rebates and anticipates a payback on the investment of less than a year, said Patrick DeOrdio, vice president of operations.

Maines had been using 400 watt, high-pressure, high-intensity sodium fixtures. It says the energy reductions are coming from a reduced wattage draw per bulb and because fixtures can be automatically turned off when not needed.

Digital Lumens, which has raised more than $11 million of venture funding, is not the only company using networking and management technologies to reduce lighting energy consumption. Others include Redwood Systems and Adura Technologies.

According to some experts, the market has huge potential. Lighting presently accounts for about 17.5 percent of global electricity use and about 20 percent in the United States. Fixtures with LED bulbs should capture 46 percent of the $4.4 billion U.S. market for commercial, industrial and outdoor lighting by 2020, says Pike Research.

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Clean Tech Venture Investing Entering Fourth Stage, Says VC

April 27, 2010

The venture industry placed its first clean-tech bets on solar start-ups about five years ago. Then came the biofuels companies turning corn, edible feedstocks, and eventually grasses and wood to gasoline and diesel replacements.

The fourth wave could focus on energy storage and new-era lighting, says venture capitalist Erik Straser.

Smart-grid and smart-meter start-ups made up the third wave of investing by a venture capital industry increasingly excited by the monstrous alternative energy and green technology markets.

Now a fourth wave is approaching with a focus that appears to be on energy storage, new-era lighting and with smart-grid money being doled out a slower pace.

“I think people are looking for the candidates for the fourth wave,” says Erik Straser, a partner at the VC firm Mohr Davidow Ventures and the head of its clean-tech investment team. “I think people would like to believe it is energy storage.”

There is little question energy storage – along with lighting – are huge opportunities. Imagine the sales of lithium ion and other advanced batteries when a million or so electric cars are manufactured annually, a production target that could be reach in five to 10 years. Companies also are beginning to develop storage batteries and devices for the home. Residents might employ them to store solar energy for use at night.

But the granddaddy of the opportunities is likely electric-grid storage, says Straser. Expect venture firms to take chances on new technologies, he says – such as new materials and systems but not necessarily lithium or nickel hydride.

In the lighting space, LEDs are likely to command the most attention. The motivation will be to find business plans from start-ups that provide new ways of making light emitting diodes or which lower the costs of turning the LED chips into bulbs.

The quest is “how to drive to the next price points,” says Straser, And to make the bundle of money that has so far eluded the clean-tech venture business.

Straser has in the past invested in biofuel companies, such as Catilin, solar start-up Nanosolar and coal gasification company Laurus Energy, among others.

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Posted by Mark Boslet

Bridgelux CEO Sees $10 LED Bulbs This Year And Has No Fear Of China

April 21, 2010

There will be a revolution in lighting within five years as cheap, bright, energy-efficiency LEDs elbow their way into the market, claims Bridgelux CEO William Watkins.

China is working on last year's technology, not next year's says Bridgelux's William Watkins

The first proof of this transition: $10 LED bulbs this year burning at bright as 40 watts, Watkins said Wednesday. At this price, consumers start to get interested, he suggested.

Watkins, who took over as LED-maker Bridgelux’s top executive three months ago, has never been afraid to speak his mind. This was the case when he ran he world’s largest disk drive company, Seagate Technology. It is turning out to be true as he settles into his new job.

During a Wednesday evening interview, Watkins said Bridgelux has seen early success with its new LED socket design. The design allows LED, or light-emitting diode, chips to snap easily in and out of fixtures, making the substitution of a new brighter bulb simple.

There will be light fixtures with the new sockets on display at the LightFair trade show in Las Vegas on May 12, less than two months after the product’s unveiling.

Watkins saved his sharpest comments for competition from China, which is on the rise. About 50 Chinese companies make LEDs and all are receiving funding from the government, he said. Streetlights across China will all be LEDs, and municipalities will subsidize the production.

So will competition get fierce? Perhaps. But Chinese companies are not on the cutting edge of technology, he says. They are not developing next year’s technology, they are copying last year’s technology, Watkins explains.

“What scares me is if China begins to enforce (intellectual property) rights,” he says. If inventors can enforce their IP rights, the nation begins to nurture the environment of innovation that is missing today, he says.

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PowerSecure’s LED Lighting Acquisition Underscores Enormous Market Potential

April 6, 2010

PowerSecure International’s LED lighting business saw 700 percent revenue growth last year, despite the global downturn.

Now the Wake Forest company that also makes smart-grid products for utilities wants more. It announced Tuesday a move to double down on solid-state lighting, acquiring two-thirds interest in commercial and industrial lighting designer Innovative Electronic Solutions Lighting. It also decided to buy the remaining one-third of EfficientLights that it doesn’t own.

PowerSecure's present LED lighting division, EfficientLights, sells to grocery stores. Revenue rose 700 percent last year.

The transactions – valued together at $14.4 million – significantly expand the company’s bet on a market that CEO Sidney Hinton says will grow 50 percent in each of the next two years.

“Our first hand experience has confirmed to us that the demand for LED lighting is robust,” Hinton said on a conference call. “The opportunity for LED lighting is staggering.”

An LED, or light-emitting diode, is a durable, light-emitting semiconductor that cuts energy use in lighting by about 75 percent. Analysts expect that as their still high price falls, LEDs will power most general lighting by 2020, especially in commercial and industrial settings where companies save labor and replacement costs from longer lasting bulbs.

Hinton characterizes the opportunity as a $100 billion market.

The company’s EfficientLights division currently serves the grocery-store market with LEDs for refrigerator cases. Hinton says expansion is underway. Customers have come seeking lights for drug and convenience store chains, he says.

The company plans to buy the one-third interest in the company is doesn’t own in the second quarter for $10 million in stock.

Innovative Electronic Solutions Lighting will complement the purchase, say Hinton. The North Carolina company presently sells commercial and industrial lighting – including street and security lights. Hinton sees opportunities for amusement park lighting and fluorescent tube retrofits in offices, products under development.

PowerSecure will pay $4.4 million for two-third ownership and have the option to buy the remaining third of the business in 2011 for a minimum of $10 million.

The value of the business is expected to grow, says Hinton.

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Posted by Mark Boslet

Supply Shortage Crimping LED Lighting Market

March 24, 2010

Broad shortages of LED chips used in the latest flat-panel TVs, laptop screens and high-efficiency lighting could turn a dangerous situation into disaster by the end of the year.

Products are already in tight supply as manufacturing capacity is running at full-bore. Analysts predict that unless new plants are brought online by the fourth quarter, severe LED rationing may hit vendors like a holiday season tsunami.

LED lighting is finding itself battling with LED TVs for precious manufacturing capacity.

The LED lighting industry could be most vulnerable. The industry uses the brightest, highest quality LEDs – the hardest to produce – and is seeing capacity already shifting to more mainstream applications, particularly TVs.

Producers are trying to respond. Aixtron of Germany and Veeco Instruments of the U.S. are rushing to double their manufacturing by the fourth quarter. Sensing the unmet demand, LED lighting maker Cree also anticipates doubling its production capacity. The company is building the world’s largest LED manufacturing plant at a site in China.

But questions remain whether this will be enough. LED designer Bridgelux says production capacity around the world for lighting chips is tight. “I want more and I can’t find it,” says CEO William Watkins. The short supply isn’t yet hurting the company, “but we can’t cut prices as fast as we might.”

The constraint also is hampering negotiations. “Right now, it doesn’t allow us to negotiate good prices on our LEDs,” adds Watkins.

Principal Analyst Jagdish Rebello at the research firm iSuppli says demand for all types of LEDs continues to outstrip supply. Sales came to 63 billion units last year and are projected to increase at a double-digit pace this year. That could bring them perilously close to the world’s production capacity of 75 billion units.

“A drastic under supply situation could occur,” warns Rebello.

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Bridgelux Redesigns The LED Light Bulb, Cuts Price

March 23, 2010

Bridgelux hopes to create what has so far eluded the LED lighting industry: an easily replaceable LED bulb.

Bridgelux's new Helieon Sustainable Light Module should make it easy to upgrade to new bulbs when they come out

The California start-up late Tuesday unveiled its Helieon Sustainable Light Module, a product it designed with Molex of Illinois. The package of LED chips and optical gear no longer needs to be screwed into a light fixture. This ease of installation should make it easy to change to new bulbs when brighter, more efficient LEDs come out, says CEO William Watkins.

The new product also cuts prices by 30 to 50 percent.

“I think it’s going to shock everybody,” Watkins said in an interview this week. “We’re really going to accelerate innovation.”

Bridgelux plans to deliver the new line of modules to the market in May and is presently working to have lighting designers incorporate the new socket into their products. Prices will range form $20 to $25 with a brightness of between 500 and 1,500 lumens. That is the equivalent of 75 to 100 watt incandescent bulbs. LED bulbs typically cut power use by 75 percent.

Watkins says the product’s novel approach is its ability to be easily switched. “People are going to want to replace them all the time,” he said. “It’s an easy way to stay on the technology roadmap.”

The challenge for Bridgelux, however, is to convince lighting manufacturers to work with the new socket. At this point, any fixture they create will only be able to use Bridgelux modules.

As competitors such as Digital Lumens and Redwood Systems promote their networked lighting strategy it will be fascinating to see how much Bridgelux is able to change the market.

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Posted by Mark Boslet

Digital Lumens Unveils Lighting System With 90% Power Savings

March 16, 2010

Digital Lumens, the secretive Boston start-up, lifted the veil on its business strategy Tuesday, showing off its Intelligent Lighting System and its desire to network lighting to make it more efficient.

The company its LED based lighting system uses sensors and a wireless network

The company, like Bridgelux, which in January raised $80 million in venture funding and signed on former Seagate CEO Bill Watkins, makes low-power LED solid-state lighting chips. LED chips continue to increase in intensity and should reach price and performance parity with traditional lighting in a couple years.

Digital Lumens makes the thunderous claim its lighting systems will reduce power demands 90 percent. More typically, LED lighting draws about 25 percent of the power of an incandescent bulb, not 10 percent.

If true, the company’s products represent a significant step up over competitors.

Digital Lumens is not the first company to conceive of networked lights. Start-up Redwood Systems announced its sensor based networking technology earlier this month, and Adura Technologies, Juice Technology and Lumenergi also play in the space.

However, it hopes to differentiate itself with a mesh of wireless sensors that permit central control and management.

Commercial lighting alone is a $15 billion market, so the opportunity for the all the companies is huge. Experts expect the commercial market to be the first to adopt more expensive LED bulbs because of labor and energy savings. The bulbs last longer, so replacement is less frequentl. The larger residential market is more price-sensitive, and adoption will be delayed until bulb prices fall further.

Digital Lumens raised $11.3 million in 2009 from investors Flybridge Capital Partners, Stata Venture Partners and Black Coral Capital.

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Bridgelux Broadens LED Product Line As Prices Fall 30% To 60%

February 3, 2010

No more one size fits all.

LED lighting is bound to be a big market. But price needs to fall as lighting quality rises. And LED arrays need to come in a variety of shapes and sizes to satisfy the myriad needs of the lighting market.

Bridgelux broadens its line of LED arrays for lighting. No more one size fits all.

Some of these conditions will take a couple of years. One is being satisfied today.

Bridgelux is rolling out a second generation of LED arrays Wednesday that for the first time addresses the one-size-fits-all problem. They also make additional steps forward in price and efficiency.

LED lighting is a market waiting to happen. When $10 bulbs hit the market (Bridgelux President Mark Swoboda expects that to happen by the end of 2012) sales will take off. LEDs use one-fifth the power of incandescent bulbs and 12 percent less than compact fluorescents, with none of the mercury. At $10 they paybacks are obvious.

Today, bulbs costing $40 or so are finding early adopters among businesses that save on energy bills and labor costs. Because the bulbs last many years longer than incandescents, workers don’t need to be sent out with replacements as frequently.

Silicon Valley start-up Bridgelux says its new products give it a broader family of arrays than its rivals. The new items vary from 240 lumens in intensity to 4,500 (the 4,500 being appropriate for high intensity retail spot lighting, street and commercial applications).

The mainstream ES Arrays will be able to serve as replacements for 100-watt bulbs.

Prices for the new products will be 30 to 60 percent less than present Bridgelux arrays and efficiency will climb by 30 to 60 percent, Swodoba says.

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Nanosys Touts Lithium Ion Battery Technology, Expects To Announce LED Customer Thursday

January 20, 2010

Nanosys made a name for itself during the nanotech bubble six years ago by promising everything nano. Company management boasted it was on the verge of making nano solar cells, flexible display screen, even astonishingly dense computer memory.

Nanosys CEO Jason Hartlove says his technology can increase the capacity of a lithium ion battery 30 to 50 percent

Those heady days have passed (as has Nanosys’s plans for a 2004 IPO). In their place, more realistic executives are chasing the more achievable goals of commercializing technology to boost the capacity of lithium ion batteries and improve the quality and efficiency of LED displays and lights.

Company CEO Jason Hartlove says the battery technology should be able to increase the capacity of a lithium ion battery by 30 to 50 percent. He expects it to show up in batteries for consumer devices next year.

On the LED front, Nanosys expects to announce a major customer win on Thursday.

Perhaps the biggest long-term opportunity for the company is the battery market. Lithium ion batteries will go into an increasing number of portable consumer devices over the next few years and batteries for electric cars should generate a $25 billion market by 2020.

Nanosys’s technology calls for using nanowires made of a silicon composite as the battery’s anode. Silicon more readily reacts with lithium and creates higher voltage. The composite keeps the silicon from losing its connectivity properties over time.

The company expects to name customers later this year. The LED customer Nanosys expects to announce Thursday is a large manufacturer likely use the company’s technology in laptops and smart phones. The consumer products could reach the market by the end of the year.

The technology, which has been widely discussed in the press, makes use of tiny, nano-scale crystal quantum dots to absorb and reissue light from a solid-state LED chip. The light released is more vivid, and its source can be the more energy efficient blue LED.

That could save money and help Nanosys redefine itself as a company with real products, not just a nano vision.

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Posted by Mark Boslet

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