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Strategic shift as Luminus closes $72m finance

Luminus Devices looks beyond televisions and display applications as investors sink more than $72 million into the advanced LED manufacturer.

Massachusetts-based LED maker Luminus Devices is widening its focus to include applications in general illumination, following a huge new round of financing.

The company, a spin-off from the nearby Massachusetts Institute of Technology, garnered an additional $72 million in its latest venture round, with investors aiming for a large future pay-off by increasing the set of applications targeted.

Up until now, Luminus had been concentrating on the displays sector, where its microstructured "photonic lattice" LEDs have been designed into rear-projection televisions (RPTVs) and pocket projectors.

The large-format LED chips made by Luminus are very powerful, meaning that only a handful of them are required to supply sufficient luminous intensity in a backlight - whereas hundreds of conventional LED chips would be needed.

But despite securing Samsung as a major customer in the Korean electronics giant s RPTVs, Luminus has been a victim of the runaway success of the rival flat-panel LCD technology.

As a result, and despite the excellent picture quality that the Luminus technology provides, Samsung has sold far fewer of the RPTVs than had been predicted - one estimate suggests that only 1 million of an expected 20 million of these high-end TVs have been sold so far.

Luminus has also developed technology for LCD backlights, but displacing the cold-cathode fluorescent lamps (CCFLs) in the flat-panel TVs has proved difficult for all of the LED manufacturers because of the high additional cost of the technology.

Nevertheless, Luminus should feature in a 52-inch LCD TV set to go into production later this year, and its 4 mm2 emitters are also being used in pocket projectors. The emerging field of "pico" projectors - even smaller, hand-held devices that are the size of a cell phone, could also be ripe for Luminus.

While the additional $72 million will provide a huge boost for the company, enabling it to accelerate new product development, it does mean that the investors will have to seek a very lucrative exit strategy in the future.

As Luminus states, the latest financing highlights a significant strategic juncture, in that it will now be targeting a much broader array of LED applications. CEO Udi Meirav added, "This investment marks a new phase in the growth of our company, and it will provide us with the resources to expand our product line, serve new markets and deliver the full value of our technology to our growing roster of customers."

Among other things, Luminus has been developing phosphor-converted white LEDs based on the photonic lattices, something that was not suitable for the TV backlight applications.

Alexei Erchak, Luminus CTO and a co-founder of the company, said recently that the company would be exploring what he describes as "lumen-demanding" applications where conventional LED arrays could be replaced by his high-intensity devices. These include architectural lighting, medical lighting applications, illumination in the retail sector and more.

The latest venture round was led by Boston s Braemar Energy Ventures, and included major contributions from CMEA Ventures and the Paladin Captial Group. All are focused on energy-efficient technologies.

Those financiers might be looking for inspiration from Luminus Massachusetts neighbor Color Kinetics, the solid-state lighting firm that was last year acquired by Philips in a deal valued at some $800 million (see related stories).

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