Livermore, Calif.-based lighting startup Bridgelux opened its U.S. factory last week, emphasizing the potential that still exists for LED developers in the United States to be competitive with China.
The key word? Potential. Only 20% of the U.S. factory is dedicated to serving U.S. customer demand, COO Karl Chicca told me. The remainder is focused on R&D and trials of LED materials, chips and packages that can produce brighter, more compact and lower-cost lights.
Chicca said the goal is to increase production at the factory to meet domestic demand…if it comes. Otherwise Bridgelux will use Livermore for R&D and manufacturing its most proprietary technology, while using partners in Asia for the bulk of production. So much for the good news that Bridgelux’s factory is the first new fab to open in 25 years in the San Francisco Bay Area, right?
The plant has brought has 170 employees and a $3.6 million-a-month payroll to Livermore, with plans to add 100 staff members in the next year. But Bridgelux CEO Bill Watkins said Bridgelux could have a significantly larger impact on the community, given the right government policy.
“It’s more important than jobs, it’s about building an industry, people, ” Watkins said.
Watkins conceded that LEDs are too expensive for many consumers and businesses, but he offered some aggressive predictions: outfitting a home with LEDs today costs of $2,500, while the same project in three years will be just $200. A commercial facility sees a seven-year ROI for LEDs today, but in three years could see LEDs pay for themselves in less than two.
Watkins called for state and city governments to issue revenue bonds that allow municipalities to buy U.S.-made LED lights, and pay off the debt with energy savings. Without a concerted effort, U.S. lighting companies won’t be able to compete, he said, noting that Chinese municipalities are driving down the cost of products by buying LEDs, while the federal government implements a 20% tariff on imported products.
That point was echoed by U.S. Rep. John Garamendi, who said at the event: “We have to change it from the pressure of getting the lowest price, to the pressure of getting the local price. If it’s a little higher, so what, as long as the people are employed here locally.”
Light-emitting diodes are a form of solid-state lighting that are frequently produced by commodity manufacturers, but examples exist of potentially game-changing advances in chips and material science. As my colleague Stephen Marcus mentioned in a recent report, China is emerging as a source of cleantech innovation and valuable IP, especially in lighting. Watkins said he’s aware of 55 Chinese LED companies supplying lights for televisions, computer screens, displays, automobiles and general illumination.
Vertically integrated Bridgelux has applied for 250 patents to protect its proprietary LED materials, chips and arrays. Its IP includes metal organic chemical vapor deposition reactors that grow indium gallium nitride material used to manufacture blue- and green-colored LED chips, as well as high-power LEDs and compact and efficient arrays. It has three products: the LED arrays, the Helion Sustainable Light Module (developed in conjunction with Molex), and its high-power LED die series.
The biggest differentiator for vertically integrated Bridgelux is the arrays, and the company is heralded as one of the more promising U.S-based startups in the efficiency sector. After raising $125 million in venture equity from VantagePoint Venture Partners, DCM and other firms since it was founded in 2002, investors recruited Watkins, the CEO of Seagate from 2004 to 2009, early this year to grow the company.
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