Display tech aims for a brighter future

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shorter development times and a faster route to market. Adding Lumileds' LEDs, brand-named Luxeon, to Sony's Qualia 005 took only a few months, according to Steve Landau, Lumileds' worldwide manager of marketing and communications.

"We've worked with complementary infrastructure partners so they can make components that work with our Luxeon LEDs," Landau said, "and we're rapidly developing the expertise to work and deliver products for manufacturers."

As a division of HP, Lumileds has been creating LEDs since the 1960s. However, it was only in 1999 that it became a separate company--it's a joint venture of HP spin-off Agilent Technologies and Royal Philips Electronics. The company has been doing well without the electronics market, but the volume of LEDs needed for use in gadgets will likely help business and attract much-needed competition.

Lumileds--whose CEO is Mike Holt, chief financial officer is Neil Bostock and chief technology officer is George Craford--has seen an average annual growth rate of 43 percent from 2002 to 2004, and sales for 2004 reached $280 million, according to financial results from Philips. Every year, the company has been sufficiently supplying its markets with billions of LEDs made in its San Jose, Calif., fabrication plant. However, competition should drive down costs and expand the market.

The costs of backlighting
To stay ahead of rivals, Lumileds in early February announced its latest LED, which offers up to 30 percent more light output than previous generations of chips.

But backlighting systems with LEDs can cost about five times as much as systems using cold cathode fluorescent light, or CCFL, tubes. That's why equity research analyst Jed Dorsheimer of Adams Harkness said he will remain skeptical about LEDs and Lumileds until prices come down.

"Longer-term, they're a reasonable solution," Dorsheimer said, "but in the near term you'll only see prototype levels reach the market, until there is further commoditization and lower costs."

It will be about three-to-four years before LEDs are used in popular television sizes, such as 42-inch sets, in the sub-$2,000 range, Dorsheimer predicted. The LED industry is driven by a law similar to the Moore's Law used in the microprocessor industry. Called Haitz's Law, after former Agilent Technologies scientist Roland Haitz, it says that each decade LED prices fall by a factor of 10, while performance improves by a factor of 20. That law, however, doesn't account for another issue faced by LED-based LCD TVs--heat.

Cumulatively, the number of LEDs used in a large-screen TV (in the hundreds, depending on the display size) produce enough heat to require additional fans to be used in sets, increasing the thickness of the televisions. This may be a deal-breaker for consumers concerned with sleek design.

Or they may want their LED anyway.