PROJECT EASY GREEN

Bridgelux has boosted the performance of its experimental light-emitting diodes (LEDs) grown on silicon wafers and said it will start delivering them to the market within two years.

If Bridgelux can keep on track, its silicon LEDs could dramatically cut the cost of solid state lighting: LED chips account for 60 percent or more of the cost of a bulb. It’s not a done deal — manufacturers have tried to grow LEDs on silicon for years without much success — but if it works, Bridgelux could establish a strong foothold in the market.

Silicon LEDs emitting a cool white light showed efficiencies of up to 160 lumens per watt, while warm white LEDs made on the same process emitted up to 125 lumens per watt. In March, the company trotted out a prototype that emitted 135 lumens per watt.

Just as important, the LEDs were grown on an eight-inch silicon wafer, a smaller wafer for the computer and memory industry but a behemoth for LEDs. The wafer and the substrates didn’t crack or bow.

LEDs are essentially finely tuned crystals of gallium nitride grown on top of wafers made of sapphire or silicon carbide. The epitaxial process of growing the gallium nitride is complex and the wafers aren't cheap. Most LED producers currently grow their LEDs on wafers measuring only two to four inches. Bridgelux, in fact, grows its LEDs on two-inch wafers. Large LED makers like Osram are only now in the midst of shifting to six-inch wafers. Sapphire wafers measuring eight inches across may never occur.

Silicon wafers are far cheaper than sapphire or silicon carbide. More importantly, there are literally thousands of fabrication facilities around the world that can produce eight-inch silicon wafers and that are currently running at half speed or producing fairly low-end components. The semi industry already graduated to larger 12-inch wafers. Bridgelux's, in fact, uses an old silicon fab in the Valley. 

"This is the holy grail. This is why all of the big semi guys like Samsung, LG and Toshiba are looking at LEDs," Bridgelux CEO Bill Watkins told us earlier this year. "The problem for the semi guys is that they don't know how to do it yet."

These silicon LEDs could cost 5 cents or less per unit, compared to 35 cents to 45 cents for a conventional chip, and could cut the price of LED bulbs by $7.50 or more.

Bridgelux will make the chips, but will also likely enter into joint ventures and licensing arrangements with established manufacturers.

The breakthrough is possible because of a proprietary buffer layer.

Bridgelux is in the midst of a fifth round of funding. It has raised $180 million to date.

In the social networking world, LinkedIn just went public and Groupon and Facebook look to float on public bourses at multi-billion dollar valuations in the near future.

What about greentech companies that actually make useful products?

Well, Kior, a biofuel firm, went public last week. BrightSource Energy, the solar thermal firm, filed its S-1 a few months ago, and Enphase Energy, the PV microinverter firm, filed its S-1 earlier this month.

Add another greentech company to the IPO aspirant list — Aspen Aerogels just filed its IPO registration papers with the SEC. The energy efficiency company designs, develops and manufactures high-performance aerogel insulation.

BASF and others put $21.5 million into the New England-based Aspen Aerogels company last year. This week, regulatory filings showed that it raised another $30 million.

As Michael Kanellos has written, aerogel has been the world’s best form of insulation for nearly 100 years. The material, however, has only occupied niche markets because of its expensive price.

Aerogels look like hunks of plastic but are actually complex, porous strands of silica that capture air or molecules. The high cost of aerogels comes largely because the raw materials get cooked in high temperature/high pressure environments in relatively small batches.

From the Aspen Aerogels S-1:

• Our technologically advanced products are targeted at the estimated $32 billion annual global market for insulation materials. Our insulation is principally used by industrial companies, such as ExxonMobil and NextEra Energy, that operate petrochemical, refinery, industrial and power generation facilities. We are also working with BASF Construction Chemicals and other leading companies to develop and commercialize products for applications in the building and construction market.
• We achieved a compound annual revenue growth rate of 46.7% from 2008 to 2010, with revenue reaching $43.2 million in 2010.
• Our aerogels are complex structures in which 97% of the volume consists of air trapped in nanopores between intertwined clusters of amorphous silica solids. These extremely low density solids provide superior insulating properties. Although aerogels are usually fragile materials, we have developed innovative and proprietary manufacturing processes that enable us to produce industrially robust aerogel insulation cost-effectively and at commercial scale.

The company had sales of $12.2 million in the first quarter of this year with net losses of $1.7 million.

Although the company sizes the market at $32 billion, the market for insulation is fragmented and diverse. The primary markets for insulation are: industrial, including use as covering for pipes, valves and storage tanks; building and construction, in walls, floors and ceilings; and original equipment manufacture, including use in transportation, appliances and apparel applications. Aspen appears to be addressing the industrial market first.

A fragmented market with multiple sales channels is difficult to address for a small company. In any case, it will be interesting to see how public markets appraise the future of a pure-play energy efficiency company.

NEW YORK — Five years ago, Vizio was one of a number of unknown companies and new brands trying to break into the LCD TV market.

Since then, the company has been the top-selling TV brand in the U.S. for two years.

The company will now try to pull the same trick in LED bulbs, says co-founder Ken Lowe.

The California company will come out with a line of LED bulbs to replace 40-watt and 60-watt bulbs as well as a line of floodlights, Lowe told me at the CEA Line Show taking place in New York. I was moderating a panel with Lowe when he got up and unfurled the upcoming line of bulbs.

Vizio will also come out with a tablet.

The move could be good for consumers by accelerating a growing price war in LED bulbs. Although based in California, Vizio works extensively with contract manufacturers in Taiwan and China. It also has a robust sales channel. Vizio was one of the first manufacturers to emphasize selling TVs at Costco instead of electronics stores like Best Buy. The strategy worked and helped make Costco one of the largest electronics retailers in the nation.

Because of the past history of the two companies, one can imagine that Vizio won't have a tremendous amount of difficulty getting shelf space at the big-box behemoth.

"We don't have highly paid executives or fly around on corporate jets," is how CEO William Wang once described the Vizio corporate ethos to me.

Lowe did not provide pricing, but said the bulbs would be affordable. The tablet, based on Google's Android operating system, could also, technically speaking, be loaded up with apps for controlling home energy. Google earlier this year announced an effort to produce a networked Android bulb with Lighting Science. One therefore could imagine Vizio putting networking into its bulb and dipping a toe into home automation.

LED bulb prices have been dropping steadily. In 2008, a 60-watt replacement bulb cost close to $100. Last year, $40 bulbs began to appear. Now, Lighting Sciences sells bulbs at Home Depot for under $20. Switch Lighting, which has designed a bulb filled with liquid to dissipate heat, will come out with 75-watt-equivalent bulbs for around $25 in the second half of the year. LED bulbs can save consumers around $10 to $12 a year in energy costs, so a $20 bulb could find buyers. Some, such as VantagePoint Venture Partner's Alan Salzman and Bridgelux CEO Bill Watkins, have said that the market will toggle over when LED bulbs hit $20.

The big issue for all of these LED companies, however, will be quality. Consumes won't put up with dim bulbs that make a living room as welcoming as one of the caves in the Tora Bora region. I've reviewed a number of LED bulbs. Some are tremendous while others stink. The short demonstration Lowe provided indicated that the Vizio bulbs worked fine, but it was in an unusual environment — dark room, overhead spotlights, lots of people wearing name tags — so it was tough to tell.

Still, the history of the company and what it accomplished in TVs are factors that other bulb makers can't ignore.