-

Nobel Prize A Morale Booster for Japanese Electronics

Posted on

Shuji Nakamura, a Japanese-born U.S. professor gives a demonstration with LED lights on Oct. 7, after winning the Nobel Prize in Physics with two other Japanese scientists on Tuesday for inventing blue light-emitting diodes. Associated Press

TOKYO—The Nobel Prize in Physics, awarded this week to three scientists born in Japan, is a morale booster for the country’s beleaguered electronics industry, showing how obscure companies specializing in parts and materials retain a technological edge.

The Royal Swedish Academy of Sciences honored the researchers for inventing the blue light-emitting diode, a technology that has made possible a new kind of lighting that is more energy-efficient than incandescent bulbs.

One of the researchers, Shuji Nakamura, was working at a Japanese maker of lighting equipment, Nichia Corp., when the breakthrough occurred. The other two, Isamu Akasaki and Hiroshi Amano, helped another Japanese parts supplier, Toyoda Gosei Co. 7282.TO -0.69% , develop LED technology, the company said. Car maker Toyota Motor Corp. 7203.TO -1.79% owned 43% of Toyoda Gosei as of March 31.

While Dr. Nakamura left Nichia in 1999 amid a dispute over his remuneration for the research, the company remains the world’s largest maker of LEDs, with $2.09 billion worth of sales in 2013, according to IHS, IHS -1.10% a research firm.

Nichia’s share of the $16 billion LED market fell to 13% last year from 21% in 2005, IHS says. Though Japan is home to three of the 10 largest suppliers—Nichia, Toyoda Gosei and Stanley Electric Co. 6923.TO -2.37% — Lee Kun Soo, an analyst at IHS, says the country’s overall share is little more than 20%.

“Japanese companies are losing share because newcomers keep joining the market,” Mr. Lee said.

These include Samsung Electronics Co. and Seoul Semiconductor Co. of South Korea, Everlight Electronics Co. of Taiwan, Cree Inc. CREE -5.31% of the U.S. and a range of Chinese companies.

But analysts say Japanese companies have retained an edge in the most lucrative applications of LEDs, including automotive headlights and backlights for smartphone screens. Nichia, for example, says it has a 23% share of the market for so-called high-brightness LEDs, which are used for these and other high-tech purposes.

Apple Inc. AAPL -0.87% lists Nichia as a supplier on its website. Though Apple didn’t respond immediately to a request for comment, analysts say the Japanese company makes LEDs that are used in backlight modules for iPhones. Nichia, which is privately held and based in remote Tokushima prefecture on the island of Shikoku, declined to identify its clients.

“Japanese companies are going for the higher end, B-to-B applications,” Mr. Lee said.

LEDs can also be used for simple household lamps or outdoor lighting, where they are slowly replacing incandescent bulbs. LEDs accounted for 15% of sales of household light sources last year, up from 4% in 2009, according to Euromonitor, a research firm.

“The publicity generated by this award is likely to boost consumer interest in LED lamps,” Euromonitor said, noting that consumer uptake in Asia and continental Europe has been more rapid than in the U.S. and the U.K.

While some Japanese electronics giants, such as Panasonic Corp. 6752.TO -1.18% , make LED lighting for consumers, Nichia sells only to other businesses, a spokesman said. Like other Japanese companies, it may benefit less from the buzz generated by the Nobel Prize than companies based elsewhere that have consumer-facing businesses, analysts said.

Still, the news of the Nobel Prize for the invention of the elusive blue LED was a shot in the arm for a troubled Japanese science and technology establishment. The blue diode, which first appeared in 1992, was needed to produce white light by combining it with red and green diodes, which already existed.

Only about three weeks ago Sony Corp. 6758.TO +0.10% said it expected to lose $2.15 billion in the year through March, much more than it had previously forecast. In a sign of the shrinking presence of the Japanese electronics industry, the country’s largest consumer technology trade show, currently under way in a suburb of Tokyo, this year has drawn the smallest number of exhibitors since its inception in 2000.

The Nobel award also follows a finding by the government-funded Riken research institute that one of its scientists, Haruko Obokata, had made serious errors in a study purporting to offer a groundbreaking way of making stem cells easily.

The Nikkei business daily, in an editorial, said manufacturers should “draw inspiration” from the Nobel and “consider anew how to create and promote innovative studies that can foster new industries.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: