By Bill Watkins, 08.18.10, 6:00 PM ET – You’ve likely heard that LED lighting is a good thing. I’d go so far as to say it has the potential to help make history and change the world.

We’ve been living and working in artificial light for over 130 years, ever since Thomas Edison’s first light bulb. But despite the progress that our well-lit society has made, we’ve paid a significant price–environmentally and financially–for incandescent, fluorescent and other forms of traditional lighting.

An LED (light-emitting diode) is a solid-state semiconductor device that converts electricity into light. It consumes far less energy and has a substantially longer lifespan than traditional lighting.

As energy efficiency becomes increasingly important for controlling costs, improving energy independence and reducing environmental impacts, LED lighting will become the world’s leading source of manufactured light.

One of the most compelling aspects of this lighting leadership story is that LED lighting will grow globally using the existing infrastructure. We don’t have to invest billions of dollars in new power grids, new wires, new switches or new networks.

The latest research data indicates that a decade from now, nearly half of the commercial lighting business will be owned by LED lighting.

Right now, 20% of the world’s electricity is used for lighting; that can be reduced to 4% with LED lighting. And by 2030 LEDs will drive energy savings equivalent to 334 million barrels of oil per year in the U.S. alone.

Let’s examine how LEDs will change the future of the lighting market. Here are five illuminating truths:

1. It’s a massive $100 billion market that already exists. LEDs are a proven, effective solution implemented in everything from flashlights to flat-panel screens and car headlights. In Los Angeles, where municipal lighting is becoming LED, the city will reduce their annual energy consumption for public lighting by 40%.

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And since LED lighting is a semiconductor technology, it will act as a platform to deliver a wide variety of intelligent applications and improved functionality with a wealth of upgrade options for consumers.

One key to breaking the market wide open is hitting the right price points. And the price of LED lighting is rapidly declining. That’s when the large, incumbent manufacturers of traditional lighting technology will fall behind in the market.

Recall the dilemma of the wet film industry when digital photography took hold. It lost a tremendous chunk of the market. The incumbent traditional lighting manufacturers face the same dilemma. Every dollar they invest in LED technology steals from their core business. No incremental revenue is gained by the additional development expense.

Alternatively, for up-and-coming LED companies, every dollar invested in technology grows revenue proportionally.

2. The lighting market will increasingly look, feel and operate like the information technology industry. Light bulbs represent the world’s last vacuum technology, so digital lighting is where the semiconductor, software and disk-drive industries were 40 years ago–on the edge of steep and continuous growth.

Solid-state digital lighting platforms will provide a wide range of easy-to-use applications with increased and intelligent functionality, like motion sensors, smoke detectors, dimming capabilities and color adaption for starters. You can already run your stereo system through LED lighting, and will even be able to turn your lights on and off remotely using your iPhone.

3. The traditional lighting business fosters long-accepted rules, particularly around innovation. Traditional manufacturers take 16 months to two years to innovate–far too long to bring today’s customers the changes they want and need. So startups are breaking the rules, compressing innovation cycles into as little as three months. Speed to market in the sluggish lighting industry is the essence of true value creation.

4. The lighting industry must start to view the world as a commercial whole, creating a global supply chain. By conducting LED research in the U.S. and diversifying manufacturing across the globe, it’s possible to be an asset-light company that doesn’t invest a lot of precious capital in fixed production costs, resulting in a significant, positive impact on product cost.

5. LED prices will continue to decline until there’s a thriving, global mass market.

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Last year LED light bulbs cost between $75 and $100. With vertical integration and an asset-light manufacturing model, it’s possible to bring products to market faster at a dramatically reduced cost. LED light modules are already available for about $20, the inflection point for the adoption of LED lighting in a commercial environment, with a payback of about two years. At a $10 price point, the payback will be one year and the residential market will explode.

American author James Thurber said there are two kinds of light: The glow that illuminates and the glare that obscures. But there’s only one kind of light for me, and that’s LEDs.

Bill Watkins is CEO of Bridgelux, an LED manufacturer. Prior to Bridgelux, Watkins was CEO of disc drive maker Seagate Technology.

A look at attempts by Dow, Globalfoundries, and Bridgelux to build competitive high-tech factories in the U.S.

By Peter Burrows, Jack Kaskey and Ian King

High-tech manufacturing plants that make products such as electric-car batteries and LED lighting may create millions of jobs in upcoming years. Few of those jobs are likely to be in North America, where 49 chip factories have shut down since 2000. In the same period, Taiwan and China have built dozens. Many technology executives say the only antidote is government assistance, which has been far greater in other parts of the world. Now some U.S. officials are responding with subsidies and tax breaks, in an effort to combat high unemployment. Here’s a look at three companies that are seeking to take advantage and create high-tech manufacturing jobs at home.

DETROIT POWER PLAY
As the U.S. economy unraveled in October 2008, Andrew Liveris, chief executive officer of Dow Chemical (DOW), asked his director of business development, Ravi Shanker, how they could create jobs near Dow’s Midland (Mich.) headquarters, 130 miles northwest of Detroit. Shanker suggested that Dow make lithium ion batteries, the key component of electric-car engines. The Li-ion industry is expected to grow from $200 million to more than $25 billion by 2015, according to Needham & Co. In 2008, Asian companies had 98 percent of the market.

On June 21, Liveris broke ground on an 800,000-square-foot plant in Midland that will employ 800 people making 60,000 Li-ion batteries a year. It’s owned by Dow Kokam, a joint venture created in 2009 with a U.S. partner that licenses technology from South Korean battery maker Kokam. Liveris is hoping Michigan’s skilled workforce will be able to help it win business from companies such as Honda (HMC), Ford (F), and Tesla Motors (TSLA), the electric-car maker that went public on June 28.

The deal was predicated on government support, as Dow Kokam received $161 million of the $2.4 billion the Obama Administration has earmarked for the electric-car industry. That covered half the cost of the 400,000-square-foot first-phase plant. An additional $180 million in Michigan tax incentives will help fund the second phase. “We would never have built it in Michigan, or the U.S., without that aid,” Liveris says. “It takes some of the risk away from the investment.”

Dow is using federal and state grants for a facility in town to make solar roofing shingles, employing an estimated 1,200 people. In addition to the 2,000 permanent workers at the two factories, Liveris believes the projects will create 14,000 jobs in local industries and services.

To make real progress, Liveris says the U.S. needs to cut corporate taxes and adopt an energy policy that promotes American-made alternative technologies. As a member of Thailand’s Board of Investment, he advises the Thai government on how to craft the sorts of financial incentives he wishes were available in the U.S. “It’s not a level playing field,” he says. – Jack Kaskey

FUNDED BY ABU DHABI
When chipmaker Advanced Micro Devices (AMD) announced it was getting out of the manufacturing business in 2007, people in Malta, N.Y.—a town of 13,000 that is 20 miles from Albany—worried about the fate of the massive plant AMD was planning to build there. Help came from an unexpected source: the government of Abu Dhabi.

The $6.6 billion, 300,000-square-foot factory project has been taken over by Globalfoundries, the company created when Abu Dhabi’s Advanced Technology Investment bought AMD’s plants in Dresden, Germany, and took over the Malta project. As in Michigan, subsidies were essential. New York State committed up to $1.2 billion in tax breaks and other incentives, depending on how many jobs the Malta facility creates. According to the Semiconductor Industry Assn., building a chip plant in the U.S. adds $1 billion in costs over its lifetime.

With both a state-funded nanotechnology research center and IBM’s (IBM) headquarters nearby, Malta has a healthy population of top engineers who are suited to this highly skilled work—which is part of the appeal for the company. (You try depositing a layer of chemicals that is one atom thick on a chip.) The jobs will pay well for the 1,300 people who will work there when the Malta factory opens in 2012. Dennis Mullen, chairman of the Empire State Development Corp., says his agency expects the project to create three or four times as many jobs outside the plant. – Ian King

THE COSTS DON’T WORK
When Bill Watkins took over Bridgelux in January, he hoped it would bring hundreds of jobs to the chip factory the company had just bought in Livermore, Calif., 40 minutes east of Silicon Valley. Bridgelux makes electronic lights based on the same light-emitting diodes that illuminate laptops and some flat-panel TVs—a technology that is expected to displace Edison’s incandescent bulb as the core of the $100 billion-a-year lighting industry. All Watkins needed, he said, were some big customers, such as state or local governments, to commit to buying enough Bridgelux LEDs to get the business off the ground.

So far, Watkins has made “zero progress” on getting help for his Made in the U.S.A. plan. While senators, state officials, and utility executives talk about job creation, none has offered contracts that would allow him to add to the small crew of workers at his Livermore factory. Instead, he plans to move ahead with projects in China, India, Malaysia, and other places Bridgelux has been offered deals to retrofit streetlights or office buildings in exchange for creating local jobs. One Asian country—he refuses to say which, for fear of imperiling negotiations—offered to pay 80 percent of his workers’ salaries for the next decade, along with a tax break, low-interest loans, and free land for the plant. Nothing in the U.S. comes close. “I think Bill’s given up on the idea of volume manufacturing in the U.S.,” says longtime friend Eli Harari, CEO of memory-chip maker SanDisk (SNDK).

Watkins has seen this movie before. Until January 2009, he was CEO of Seagate Technology, the world’s largest drive maker. To maintain profits in the face of falling prices, the company outsourced thousands of low-wage production jobs and, more recently, research and development positions. He had hoped Bridgelux would be different. With some minor incentives—such as a 10% premium over rock-bottom prices in a few big municipal contracts—he thinks Bridgelux could gain enough volume to compete with anyone. He would like to invest $150 million in the Livermore factory, in addition to $50 million already invested, and nearly triple its staff, to more than 350. The obstacle, he believes, is politics. While Americans want jobs, they want their low, low prices even more: “I’m going to spend the next year trying to find someone that is willing to pay to have something made in the U.S.” When Watkins tells foreign government officials about his plans to boost American manufacturing, he says, “They laugh. Everyone knows the costs don’t work.”

Of course, Watkins isn’t willing to mortgage his company’s future for pure patriotism. He expects sales to double, to more than $60 million in 2011. “I want to create jobs here for my own personal reasons, but at the end of the day it doesn’t matter,” he says. “I can make Bridgelux successful wherever the jobs are.” – Peter Burrows

Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco. Kaskey is a reporter for Bloomberg News. King is a reporter for Bloomberg News in San Francisco.

THIEF RIVER FALLS, Minnesota and Livermore, California, USA – Electronic components distributor Digi-Key Corporation, recognized by design engineers as having the industry’s broadest selection of electronic components available for immediate shipment, and Bridgelux, a leading developer and manufacturer of LED lighting technologies and solutions, today announced the two companies have entered into an agreement in which Digi-Key will distribute Bridgelux products to customers worldwide.

The agreement gives Digi-Key’s customers ready access to Bridgelux’s entire portfolio of LED array products, including the recently introduced neutral white color temperature (4100K) LED arrays.

Bridgelux offers one of the industry’s widest ranges of solid-state light sources, delivering 240 to 4500 “hot” lumens across a broad range of color temperatures. This expansive portfolio of UL-recognized arrays provides designers with wide-ranging options as they develop high quality replacement lamps and luminaires for a market rapidly transitioning to energy efficient lighting.

Bridgelux products are now available for purchase on Digi-Key’s global websites and will be featured in future print and online catalogs.

“We are very pleased to announce this distribution agreement with Bridgelux,” said Dave Doherty, Digi-Key’s vice president of semiconductor product. “The demands of an emerging customer base vary greatly between discrete HBLEDs, arrays to fully turn-key solutions. The Bridgelux relationship is keeping with Digi-Key’s commitment to provide its customers with the latest and most innovative range of products.”

“Digi-Key’s exceptionally broad range of products and its world-class customer service have made it an industry leader. We are proud to partner with Digi-Key and look forward to working with them to serve our customers,” said Dave Barnby, Bridgelux vice president of worldwide sales. “We are impressed with Digi-Key’s Lighting Solutions Technology Zone approach, consolidating solid-state lighting products on their website, simplifying component selection for lamp and luminaire design engineers.”

Digi-Key Corporation focuses on providing customers with superior service, which includes product selection and availability, on-time delivery, and responsiveness. Using leading-edge processes and state-of-the-art technologies, Digi-Key serves a global customer base from its 600,000 square foot facility in Thief River Falls, Minnesota, USA.

About Digi-Key Corporation
As one of the world’s fastest growing distributors of electronic components, Digi-Key Corporation has earned its reputation as an industry leader through its total commitment to service and performance. As a full-service provider of both prototype/design and production quantities of electronic components, Digi-Key has been ranked #1 for Overall Performance for 18 consecutive years from among North America’s more than 200 distributors (EE Times Distribution Study/August 2009). Offering more than 1.7 million products from more than 440 quality name-brand manufacturers, Digi-Key’s commitment to inventory is unparalleled. Access to the company’s broad product offering is available 24/7 at Digi-Key’s top-rated website, www.digikey.com.

About Bridgelux
Bridgelux is a leading developer and manufacturer of technologies and solutions transforming the $40 billion global lighting industry into a $100 billion market opportunity. Based in Livermore, California, Bridgelux is a pioneer in solid-state lighting (SSL), expanding the market for light-emitting diode (LED) technologies by driving down the cost of LED lighting systems. Bridgelux’s patented light source technology replaces traditional technologies (such as incandescent, halogen, fluorescent, and high intensity discharge lighting) with integrated, solid-state solutions that enable lamp and luminaire manufacturers to provide high performance and energy-efficient white light for the rapidly growing interior and exterior lighting markets, including street lights, commercial lighting, and consumer applications. With more than 275 patents applications filed or granted worldwide, Bridgelux is the only vertically integrated LED manufacturer and developer of solid-state light sources that designs its solutions specifically for the lighting industry. For more information about the company, please visit www.bridgelux.com.

Editorial Contact for Digi-Key Corporation
Erica Hanson Manager, Corporate Communications & Media Relations
218-681-8000, Ext 2247 erica.hanson@digikey.com

Editorial Contact for Bridgelux
Brian T. Fisher Director, Corporate Marketing
925-583-8563 brianfisher@Bridgelux.com

LED chip manufacturer Bridgelux and Molex win “Most Innovative Product of the Year Award” for Helieon Sustainable Light Module

The Helieon LED lighting system is claimed to be the first plug-and-play, sustainable solid state lighting module to integrate high-efficiency precision lighting with an easy-to-use socketed solution to accelerate innovation and enable the mass adoption of solid state lighting.

Combining solid state lighting technology from Bridgelux and interconnect technology from Molex, the Helieon lighting system provides easy interchangeability, upgradeability and replacement.
May 13, 2010

The system emulates a traditional lighting socket in that beam angle, color temperature and light output can all be easily changed or upgraded with a simple twist of a wrist after installation without the complexity and expense of removing the luminaire. High system efficacy enables luminaires with operating efficiencies of >50 lm/W.

Product options are tailored to match light output levels of traditional light sources, delivering between 500 and 1,500 lumens under application conditions in halogen and fluorescent color temperature options. Helieon modules are available with narrow, medium and wide flood beam spread options that enable precision effects for a wide variety of lighting applications.

Earth2Tech
By Katie Fehrenbacher
May. 12, 2010

It’s fitting to have the world’s largest lighting convention in the city that’s so covered in lights you can see it from space. This week the lighting show Lightfair kicks off and companies from the world’s largest — Philips, General Electric, Sharp — to small innovative startups, have been launching products and unveiling their world-domination lighting plans. Of course, LEDs (light emitting diodes) are the next generation of solid state lighting technology and are dominating the news at the show (check out our report on Opportunities in LED Solid-State Lighting on GigaOM Pro, subscription required). Here’s 10 companies that are outshining the rest:

Lemnis Lighting: Lemnis — an LED powerhouse to watch — launched six new LED bulbs at Lightfair, including the Pharox 500, a 500-lumen incandescent replacement that’s dimmable.

Netherlands-based Lemnis is run by Warner Philips, the great grandson of the founder of lighting giant Philips, and the company introduced its first LED bulb that can replace an incandescent in a standard socket about four years ago. In March it raised $35.7 million in funding, and at the time Philips said the round was raised with a pre-money valuation (an estimate of how much the company is worth before the funding) of $170 million.

Philips: Yep, Dutch lighting giant Philips has finally awoken to the LED as a replacement for the common incandescent bulb (here’s a list of five of these bulbs you can soon buy). At Lightfair, Philips launched the 12-watt “EnduraLED” light bulb, which can replace a 60-watt incandescent. Philips says it can deliver 80 percent energy savings and lasts 25,000 hours, or 25 times longer than an incandescent bulb. The company hasn’t priced the bulb yet, but the current industry standard for this product is around $40-50 per bulb. Philips says it will be available in the U.S. in the fourth quarter of 2010.

GE/Cree: Last month GE announced its own 9-watt LED bulb that can replace a 40-watt incandescent bulb and uses Cree’s LED chip. At Lightfair this week GE is showing off that bulb, which lasts 17 years and costs between $40 and $50, according to the company. GE plans to start selling the bulb by the end of 2010 or early 2011. GE is also reportedly planning to show ideas for organic light-emitting diode (OLED) lighting applications including thin form fixture prototypes.

Redwood Systems: Lighting startup Redwood Systems officially launched its networked lighting management technology at Lightfair. The company — founded in 2008 and based in Redwood City, Calif. — uses sensors, lighting and digital tech to measure light levels, motion, occupancy, and temperature and can cut down the energy consumption of lighting in commercial buildings. The company’s centralized power system, dubbed the Redwood Engine, can power up to 64 LED light fixtures using low voltage network cables. Redwood Systems co-founder and CEO Dave Leonard is a former Cisco executive, and the company raised $12 million from Battery Ventures and U.S. Venture Partners.

Illumitex: Illumitex is using optical design to make LEDs brighter. The Austin, Texas-based 5-year-old company launched its first products last month, and has redesigned an LED package around the chip itself to deliver LEDs that are two times brighter than tech from LED competitors, according to MIT Tech Review. The company sells the LED tech to manufacturers — targeting mobile displays, televisions and general lighting — and counts Singapore’s LEDWorks as one of its customers. In March 2008 Illumitex raised its first round of $10.5 million in funding and CEO Matt Thomas told us last year that it was looking to raise another $20 million.

Sharp: Japanese electronics giant Sharp has been developing LED tech for 40 years, but at Lightfair this year it’s launching its first LED products for the U.S. market, including seven LED lamps for industrial and commercial use. While all of the lighting bigwigs have been working on LED for years, it’s only recently that companies like Sharp, GE and Philips have started to launch real commercial products.

Bridgelux: LED chip and array maker Bridgelux launched its Helieon LED light system with Molex in March, and this week at Lightfair won an award for Most Innovative Product of the Year. The technology offers a “plug-and-play” LED solution for industrial and commercial building owners, and Bridgelux says at a high enough volume, retails for less than $20 per unit, and has a lifespan of more than 10 years.

Bridgelux raised a whopping $50 million in January and brought on former Seagate CEO Bill Watkins as the new captain in an effort to scale up its production this year. The company is also on the short list of greentech IPO candidates.

Diogen Lighting: I’ve got to admit I don’t know all that much about Diogen Lighting and its LED products, except for the fact that they’ve gotten eco-actor Ed Begley Jr. to be their spokesman, and the Cleantech Group says they’re flying Begley out to Vegas this week to make the rounds. The company also has to be the only LED maker that was spun out of a company that makes “heirloom quality animated holiday decorations.” Weird.

Toshiba: Like its peer Sharp, Japanese electronics giant Toshiba is using Lightfair to move into the North American market. The company announced its “E-Core” LED product line (which it actually already recently started selling in the U.S.) at the show. E-Core provides an 85 percent power reduction compared to an incandescent bulb, and lasts 40 times longer, says Toshiba. Toshiba has actually now phased out incandescent light bulbs completely (reportedly moving that deadline up by a year) after manufacturing them for over a century.

Cavet Technologies: Canadian company Cavet launched its smart fluorescent lighting controller called the LumiSmart ILC at Lightfair. The controller, which is designed for industrial and commercial buildings, can reduce energy consumption of lighting and be installed “within minutes,” says Cavet. Like Redwood Systems, Cavet’s technology is based on using digital and network technology, and comes ready to plug into the Internet (or other networks). Buildings that use lighting like this can work with utilities to automatically be involved in demand response programs.