TOKYO (Nikkei)--Nitride Semiconductors Co. is a chip startup that makes and sells products based on ultraviolet light emitting diodes (UV LEDs). Established in 2000, the company is just now getting its business into orbit. It moved into the black for the first time in the year ended March, and company president Yoshihiko Muramoto is confident that all of the red ink will be erased come fiscal 2010.
That confidence is grounded in the company's successful development of a method for mass-producing UV LEDs. Up until recently it could only supply the devices in small lots, but in the second half of this year it started up a volume-production system.
Nitride Semiconductors is using that volume-production system to mass-produce UV LEDs that can serve as the UV light source for money handling machines. UV light is used to identify counterfeit bills, and by using the new UV LED in place of conventional UV lamps, the money-handling machines can be designed smaller.
The startup developed this UV LED light source in collaboration with a maker of money-handling machines, but it is also studying other applications for the devices, including machines that work with UV-hardening resins, air purifiers that utilize photocatalysts, and even diagnostic equipment.
It took Nitride Semiconductors eight years to realize a system for mass-producing UV LEDs. In fact, grappling with the technical challenges for commercialization of UV LEDs is why the startup was established in the first place, spun off as it was from Tokushima University.
UV LEDs are similar to blue LEDs in that they are both based on nitride semiconductor materials. But whereas the light-emitting layer in a blue LED is made from indium, gallium and nitrogen, the same layer in a UV LED also contains aluminum. This addition makes the layer far more complicated and required Nitride Semiconductors to develop a new structure for the stacked films. This is the reason why UV LEDs have been later in coming to market than blue LEDs.
In working to puzzle out the challenges, the company invited Tokushima University Professor Shiro Sakai to act as a technical advisor. Sakai is now an executive of the startup, but at the time he was invited as an advisor because of his research on nitride semiconductor crystals. Sakai had designed a way to grow crystals using a method known as metal-organic chemical vapor deposition, or MOCVD for short. He built an MOCVD machine at the company and that is when progress really began being made.
Using that MOCVD machine, Nitride Semiconductors began joint research with Tokushima University which eventually led to the commercialization of UV LEDs. The first generation of devices released in 2002 had a weak output of 0.5 milliwatt, but the current offerings have an output of 9.5mW.
Nitride Semiconductors is now using that same MOCVD machine for the mass-production of UV LEDs. The company has a factory where it grows the nitride semiconductor crystals on sapphire substrates, but it has forgone the huge equipment expense by outsourcing the post-processing tasks. The substrates are sent to another chipmaker where electrodes are embedded and the chips are sliced and packaged. However, Nitride Semiconductors inspects every UV LED itself before shipping, so even though the company is small in size it has ultimate responsibility over quality.
Nitride Semiconductors is unique not only for having succeeded in commercializing a technically challenging product, but also for having its own factory. There are many semiconductor ventures in Japan, spun off from universities or from larger corporations, but few have actually reached orbit with their businesses. So the fact that Nitride Semiconductors has pulled its head above water is reason enough for the company to be referenced as a business model in the semiconductor industry.
--Translated from an article written by Nikkei staff writer Shinichi Jinbo.
(The Nikkei Business Daily Tuesday edition)