Color the market blue

This might be a tough question for some people: What relatively obscure Japanese chemical company specializing in phosphors has been first to market with a laser that should dramatically affect industries ranging from data storage and printing to spectroscopy and cancer research? The answer-if you don't know from reviewing technical journals, talking to your colleagues, or reading The New York Times-is Nichia Chemical Industries, where the blue-emitting laser diode was invented and which has

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This might be a tough question for some people: What relatively obscure Japanese chemical company specializing in phosphors has been first to market with a laser that should dramatically affect industries ranging from data storage and printing to spectroscopy and cancer research? The answer-if you don't know from reviewing technical journals, talking to your colleagues, or reading The New York Times-is Nichia Chemical Industries, where the blue-emitting laser diode was invented and which has a technology lead of several years over its nearest competitors, including aggressive multinationals in Japan, America, and Europe.


Shuji Nakamura
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How this unlikely leader in the development of, first, blue light-emitting diodes (LEDs) and then blue (or violet) laser diodes reached this height says much about how innovative researchers and leaders can make a difference, even in consensus-oriented Japan. Shuji Nakamura is the now well-known innovator; Nabuo Ogawa, founder and chairman of Nichia, and Eiji Ogawa, current president, supported Nakamura's research.

Nichia is located in Anan, a small city on the coast of Shikoku, one of the smaller Japanese islands, in the southwest of the country. Its predecessor company was founded in 1948 by Ogawa to make a material used in the antibiotic streptomycin. He set up Nichia in 1956 to manufacture calcium phosphate, used in the production of fluorescent lamp phosphors. A series of phosphor and high-purity chemical products followed, along with an LED line. The family-owned company now employs approximately 1500 people, with three manufacturing sites in Japan and branches in several other countries. Sales in 1999 are estimated at approximately ¥48 billion ($420 million), with revenue divided about evenly between the chemical and LED sides of the company.

Nakamura joined the R&D department of Nichia in 1979, after graduating from nearby Toku shima University with a master's degree in electrical engineering and a focus on semiconductors. When asked why he stayed in the area instead pursuing a traditional path at a large company, he laughs and says, "Nichia was the only company in the area-and my wife is from this area."

Nakamura's career at Nichia reads a bit like an obstacle course with many dead ends and only one way through. At the start, he made pure gallium source material for LEDs but quickly got into gallium phosphide crystal growth when the company thought there would be a big market for red and green LEDs. Unfortunately, competitors such as Matsushita, Sumitomo Electric (Osaka), and Toshiba (Tokyo) thought the same thing.

From 1982 to 1985 he grew gallium arsenide crystals, but again the competition proved too severe for Nichia to make a profit. For the next three years he turned to liquid-phase epitaxial growth of gallium aluminum arsenide LEDs and laser diodes-but Matsushita (Osaka), Toshiba (Tokyo), and Sharp (Osaka) proved too strong.

"I was desperate by 1988," Nakamura admits. "I had always wanted to do blue LED [and laser diode] research, but all R&D was decided by my boss, who didn't support it. So I went directly to the president." Profits at Nichia were very good at the time, and so the president not only gave Nakamura the go-ahead, but threw in a budget of $3 million.

The money enabled Nakamura to purchase metal-organic chemical-vapor-deposition equipment and spend a year studying deposition technology with Ram Ramaswamy, a professor of electrical engineering at the University of Florida (Gainesville). The question awaiting him when he returned was whether to base the blue LED on zinc selenide (ZeSe) or gallium nitride (GaN). "I personally believed that gallium nitride was a better choice, plus I knew that the big companies were all doing zinc selenide-and they always win." Fortunately, no one else at Nichia understood semiconductors or that GaN was not the popular choice. If they had, the world might still be awaiting a ZnSe blue laser diode.

The commercial release of the first GaN blue LED by Nichia in 1994 and the subsequent commercialization of the GaN blue laser diode in early 1999 are a result of Nakamura's mastery of the deposition technology and ceaseless refinements to the diode structure. The laser is already finding its way into products announced by Coherent (Santa Clara, CA), TUI Optics (Berlin, Germany), Power Technology (Little Rock, AK), and LG Laser Graphics (Kleinost heim, Germany).

The story of Nakamura and Nichia is unusual in Japan, yet it serves as a benchmark by which other companies can be judged because it reveals both the dangers and rewards of innovation and taking risks.

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