The global LED marketplace is a rapidly growing industry, attracting significant worldwide investment. In this article, Ian Thomas, managing director of Turquoise International, outlines key opportunities for investors in this fast-paced market.
By 2030, the LED market is projected to reach $132.96 billion, growing at a CAGR (Compound Annual Growth Rate) of 10.5%.[1] Demand for LED solutions is increasing, particularly in the commercial and industrial sectors where there is growing pressure to reduce both carbon emissions and energy costs.
Minding the ‘green gap’ and delivering red microLEDs
In August 2022, the Low Carbon Innovation Fund 2 (LCIF2), managed by Turquoise, announced a follow-on investment in Kubos, a Cambridge University spin-out led by CEO Caroline O’Brien, as part of a capital raise of more than £500,000. This followed a larger funding round (£760,000) led by LCIF2 in 2020. Clearly it was a good fit with LCIF2’s investment strategy which is all about developing new technologies to help reduce greenhouse gases (GHGs).
Using technology developed in conjunction with the university, Kubos has now made LEDs using cubic (as opposed to the standard hexagonal phase) Gallium Nitride (GaN) which can deliver efficient green and red devices. Cubic GaN can overcome the fundamental limitations in quantum physics of hexagonal GaN material which gives rise to the efficiency limitations.
Compared to traditional lighting, Kubos’s LED technology offers several advantages at comparable cost points, including higher energy efficiency, improved lighting quality and faster switching.
Besides this, a new market is emerging for very small LEDs, known as microLEDs, which are used in displays as well as in Virtual Reality (AR/VR) applications where there are key technical challenges that Kubos’s technology can solve too. The Research and Markets 2021 forecast suggests that the opportunity for microLEDs driven by AR/VR applications could hit US$21 billion by 2027 with a CAGR of 81%.
“Not only can we produce them (the LEDs) on large-scale wafers of 150 mm and above, but also in a way that can be slotted seamlessly into existing LED production lines,” explains O’Brien.
Conventional hexagonal GaN LEDs have gained popularity in LED lighting thanks to the material’s high electron mobility, good thermal stability and ability to emit light at high brightness levels for blue LEDs. In today’s world, a blue LED is used, with a yellow phosphor coating for general lighting applications which, by definition, is inefficient.
The optimum solution would be a red, green & blue LED, but unfortunately today’s green LEDs are currently inefficient. Likewise, small red microLEDs used in displays and AR/VR applications are very inefficient, and also require a red, green, blue per single pixel arrangement to generate good quality images and text. Fortunately, Kubos can solve both inefficiency in the green gap as well as in red microLEDs displays with its patented material technology. This will enable the production of commercial high-end, low-cost, highly efficient LEDs, which can solve both the ‘green gap’ and the problems associated with red microLEDs. In other words, where a significant drop in efficiency can be observed in the green and red wavelengths.
Using the cubic GaN material, Kubos was able to overcome the limitations of conventional GaN LEDs as well as delivering significantly higher efficiency devices. When Kubos announced the first commercially compatible LEDs based on the cubic crystal phase of GaN in February 2021, it had achieved one of the few breakthroughs for LED technology since the early 1990s. Now Kubos plans to licence its technology to major manufacturers for LED and microLED devices, including lighting, displays, AR/VR, communications, automotive and horticulture.
Approaching new markets
The technology’s main applications are in general lighting, displays, AR/VR, communications, automotive and street lighting. According to the company’s own calculations, LEDs made with Kubos’s technology could save up to 500 million tonnes of carbon emissions if there was a 100% adoption rate worldwide. To give some context here, this number is equivalent to the annual carbon emissions produced by 150 coal-fired power stations.
Also, the levels of efficiency in displays could receive a significant boost from adopting Kubos’s microLEDs because the current standard is only around 2% external efficiency. With this technology, savings of up to 100 million tonnes of emissions could be achieved although, again, this figure is based on a rate of 100% adoption. Its use would also extend battery life of AR/VR headsets, reduce self-heating effects and improve the image quality, all of which are the keys to the success of these devices.
Driving investor interest
As businesses become increasingly focused on sustainability, LED lighting and displays (including AR/VR) are likely to attract more and more capital. Our investment in Kubos is allowing the company to progress towards its technical and commercial goals, as well giving it the means to explore the technology’s capabilities in new markets, one of which is providing high switching speed LEDs for visible light communications applications.
Furthermore, its deployment would strengthen the supply chain, something that is critical to safeguarding future production for these markets, as O’Brien points out. And this has become especially true over the past few years because of the intensively documented semiconductor shortages caused by COVID-19 shutdowns and rising political tensions.
“Demand for flexible and local manufacture of components is accelerating. Sudden changes in the current climate can put a burden on supply and distribution chains in addition to slowdowns caused by critical closures or production stoppages. As well as giving manufacturers the opportunity to improve their device capabilities, Kubos can deliver a manufacturing process that is compatible with the current standard and can be established relatively quickly,” O’Brien concludes.
[1] https://uk.finance.yahoo.com/news/led-lighting-market-size-share-144800492.html#:~:text=The%20global%20LED%20lighting%20market,%2Dlamps%20and%20T%2Dlamps.
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