September 12, 2006...With the completed transfer of Emcore's 49% interest in GELcore LLC of Ohio to General Electric, we look with refreshed eyes at that precedent-setting young GE business. In the following column, our founding editor, Jo Ann McDonald, shares her perspective on what the shift represents, and she has an interview with GELcore president/CEO, David Elien.

When serving as Emcore's director of corporate communications at the turn of the century, one of the highlights of my three year consulting stint was helping formulate and position the GELcore joint venture between Emcore and GE. That's when I got totally hooked on the notion of popularizing the move to energy efficient solid state lighting (SSL). Having been educated as an environmental sociologist in the 1960s, I knew it was just a matter of time before the world actually woke up to the wisdom of changing to alternatives energy sources. When GELcore was formed, both multijunction solar and solid state lighting (SSL) were in R&D at Emcore, and blue spectrum LED development was catching on fast throughout the international compound semi (CS) industry. None of us back in the '60s thought it would take over 40 years to make even rudimentary inroads in alternative energy sources. As Emcore's and Aixtron's MOCVD technologies rapidly progressed from their origins in the mid-1980s (the timeframe when I began reporting exclusively on the compounds), multijunction solar cell and blue spectrum LED technologies progressed. Emcore's MOCVD unit is now owned by Veeco, of course, and it's important to remember that without MOCVD-based epitaxial manufacturing capability, none of what we're seeing today, as we've reported in these online pages since 1996, would be possible.

Enough ancient history. The recent GELcore/GE/Emcore/Nichia news (ref: our coverage and LEDs Magazine's coverage) is loaded with innuendoes of industry shifts currently underway. In my opinion, GE now owning all of GELcore--and GELcore openly teaming with Nichia--means that GE can not only compete for market share more evenly now with its fellow giant international lighting competitors, Royal Philips Electric of the Netherlands (which now owns all of Lumileds) and Osram GmbH of Germany (which has always owned all of Osram Opto), it also means that these three giants hold the future of SSL in their collective hands. And those hands can act with clout and strength, especially when they play what I call the energy card. In my opinion, these industry shifts represent incentives for all of us to play the energy card and play it up round by bringing our CS-based alternative energy technologies to the attention of the world's mainstream and business press. A company with the clout of GE with its innovative ecomagination initiative can do a great deal in helping popularize SSL (and UV-LEDs for purification, coupled with solar).

GE has spent recent years reorganizing its business units. Michael Petras, who was the original president and CEO of GELcore when GE and Emcore formed the JV in 1999, is now VP of GE's Consumer and Industrial business. Michael's a brilliant man, quickly moving up GE's corporate ladder. In the announcement of GE's complete takeover of GELcore, Michael commented that "This agreement is a true win-win outcome for both parties and clearly demonstrates GE's commitment to solid state lighting technology. GE and Nichia's combined excellence creates a preeminent alliance that is ideally suited to support GELcore's efforts to accelerate the growth and penetration of LED-based lighting solutions in the $12 billion global lighting segment." A "win-win" indeed, including an additionalwin for Emcore. Emcore's divestiture of their interest in GELcore and their epiwafer division, which recently sold to IQE, equates to a strong cash position now of about $125 million, up from $25 million last quarter. This will help Emcore move more rapidly into the terrestrial photovoltaic market as they leverage their $200 million worth of outstanding terrestrial solar bids.

Industry prognostications aside, now is the time for our readers to meet David Elien (pictured on the right), today's president and CEO of GELcore, GE's promising young SSL systems integration company that already has 100 employees and is turning the corner to profitability. In a recent Q&A with David Elien, he offered the following perspective on the past relationship with Emcore, the newly announced partnership with Nichia and where GELcore's headed:

JMcD: What are GELcore's expansion plans?
ELIEN: We continue to add key talent to our business as we develop new products and enter new markets. This year alone, our headcount will grow by 20 percent to keep pace with growing product demand. We expect this trend to continue.

JMcD: Has GELcore been buying from various LED suppliers to date?
ELIEN: Yes, we source from a variety of vendors around the world.

JMcD: Will GELcore continue buying product from other suppliers besides Nichia?
ELIEN: Yes. As a complete LED systems provider, we expect to use the best available, most cost-effective components and designs that offer our customers the best match of quality, reliability and return on investment.

JMcD: What did Emcore bring to the GELcore party and how will they be missed?
ELIEN: GE and Emcore started this joint venture back in 1999 with the goal of creating a company that would be a leading provider of solid-state lighting systems. By leveraging GE's brand and channel with Emcore's material-science expertise, we felt we were positioned for success. As a result of this partnership, GELcore has become a self-sustaining business with a bright future. Emcore has always looked at this joint venture as a strategic investment it could monetize over time. This buyout comes at an opportune time for Emcore as it enters the terrestrial solar market.

JMcD: What can GELcore do now that they're wholly GE that they couldn't do before?
ELIEN: First, the buyout of Emcore's interest in GELcore for $100 million demonstrates GE's commitment to invest in LED technology and the future of lighting. This is an important message to our customers, suppliers and employees. As a GE business, we now have an opportunity to take GELcore in a different direction and look for new ways to improve our ability to develop LED products and accelerate LED adoption with customers. We feel that the strategic alliance between GE, a world leader in traditional lighting technology and LED systems and Nichia, a world leader in phosphor and optoelectronics, such as LEDs, creates a sustainable competitive advantage that GELcore will use to advance LED technology and accelerate the penetration of LEDs into the general illumination industry.

JMcD: GELcore has kept a relatively low profile to date. Will that change? And if so, how?
ELIEN: We are focused on developing high-value LED systems that lower the cost of light for our customers. We are leading the transition from neon and fluorescent to LEDs in the signage market where we now have over 7 million feet of Tetra LED lighting systems installed. In the transportation market, we have helped drive the conversion of millions of traffic signals from less efficient incandescent to more robust and energy efficient LEDs. This has resulted in a penetration rate over 60 percent for North America. We are currently working with eight of the top 10 grocery retailers to replace fluorescent lamps in reach-in refrigerated display cases with our new LED display lighting solution. And, we are working hard to develop a violet-based, high-power white LED emitter that offers broad color temperature and CRI capability with consistent uniformity and reduced lamp-to-lamp variation. This work has been recognized by the U.S. Department of Energy where we recently won a Department of Energy award of $2.4 million to continue this SSL research. We are also heavily involved in developing SSL standards and industry education programs through our membership with NGLIA, ASSIST and NEMA. We have a lot going on at GELcore. You can expect to hear more from us in the future as we work with Nichia to penetrate the high-growth LED general illumination segment.

JMcD: Now that GE has followed suit with Philips and taken their JV totally under their wing, I view these moves as extremely positive for the SSL industry as a whole and that, as a result, we just might see stepped up rollout of product that actually makes it to the consumer shelves. My mission has always been to help accelerate getting affordable LED-based product on the shelves of stores like Home Depot and WalMart, as replacements for traditional light sources such as incandescent, fluorescent or halogen. In closing, would you care to comment?
ELIEN: This is not something that will happen overnight. Over time, LED technology will offer increasing performance, cost and environmental benefits that will be highly attractive for lighting users. But, the early and deep adopters of LED technology will be commercial users that look to LEDs to help reduce significant energy and maintenance costs.