Transcripts

"Green Options"-The Nichia Effect

SUSIE GHARIB: Cell phones are one of the biggest users of energy efficient light emitting diodes or LEDs, a major advance in lighting technology. Commercial development of LEDs didn't happen at a Japanese tech powerhouse like Sony or Toshiba, but at the tiny Nichia Corporation barely known even in Japan. As we continue our series "Green Options," Lucy Craft reports from Nichia's headquarters.

LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: The verdant rice paddies of southern Japan don't seem like a launch pad for global revolution. And yet Shikoku Island was the setting for a dramatic technological breakthrough at a modest maker of electronic chemicals, called Nichia Corporation. Takashi Sakamoto is a manager.

TRANSLATION OF: TAKASHI SAKAMOTO, MGR, LED BUSINESS PROMOTION SECTION, NICHIA CORP.: We are basically simple country people. Instead of academic debates, our approach is to just jump in and try it out. This may be not be a very efficient way to operate, but we tend to experiment first and analyze later.

CRAFT: Nichia's isolation from the mainstream may have given it an edge in the worldwide race to create what's considered the holy grail of lighting: the blue diode. Ignoring conventional wisdom, the company bet that a substance called gallium nitride was the secret to making blue diodes, the key to creating white light. Yves Lacroix, whose company makes LED manufacturing equipment, says Nichia's triumph in 1993, would forever transform the global lighting industry.

YVES LACROIX, PRESIDENT, Y SYSTEMS LTD: It was a revolution everybody had been waiting for. Obviously, it was the missing link between just displays and light, because you needed the three basic physical colors for the human eye to make white. Making white means you could make every possible colors. Everybody had been trying to do that in one way or another.

CRAFT: Yet at first, Nichia's own engineers didn't grasp the commercial implications of their discovery.

SAKAMOTO: The first white LEDs were rather dim. We didn't know what to do with them and we used to joke, maybe we could use them for the sign on a funeral home.

CRAFT: But it soon became clear that gleaning white light from semiconductors was a potential gold mine. Nichia now had the means to replace not just traffic signals and street lights, but literally anything: in transportation, in factories, even in the home, that requires illumination, starting with back-lit displays on cell phones and computers to glowing gauges in jet cockpits and car dashboards and even auto headlights. Nichia's fortunes have exploded in line with the surging popularity of LED lighting. To hang onto its lead, the company will have to fend off low- cost rivals in places like Taiwan and take a more aggressive role in setting standards for the emerging industry before its competitors do. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokushima, Japan.