Luminus Devices Founder and Chief Technology Officer Alexei Erchak (Part 4)

SM: What is the price point of your product?

AE: We had the same price as the lamps, and they were $100. We just added one light source per color. That is all it took to illuminate these large-screen televisions. That market looked great. Today the market does not look so good for DLP televisions. LCD television prices have dropped faster than anyone expected.

SM: So the market you anticipated in 2003 did not pan out?

AE: No, it didn’t.

SM: Did you raise money based on what you anticipated back in 2003?

AE: We did. We raised a Series A that was $4 million, and we started development in a lab. We started the process for making the LED chips. We raised another $4 million in 2004 to go even faster because everything was looking so good. We then raised a Series C that was about $17 million, all accelerating towards the rear-projection television application. We were talking to the television companies, and they were very interested. When we completed our development the chips were 10 times larger than the next largest LED chip in the world. They put out 100 times as much light. We had to develop radical new technologies for packaging because you cannot package these large chip LEDs in a normal LED package.

What started out as photonic lattice, just the optical part, turned into what we called PhlatLight technology. That stands for photonic lattice light, and PhlatLight technology involved the packaging, the thermal management, and the electrical distribution of current across a chip. PhlatLight became a suite of technologies that encompassed everything that goes into making a high reliability large-area LED. We actually went into manufacturing around 2006, and our first customer was Samsung. That year they launched a 56-inch rear-projection television, the first in the world that used LED technology. They used our PhlatLight LEDs, so we had entirely enabled this market only four years out of the gate.

SM: Did the Samsung product do well out of the market?

AE: The Samsung product did well but the entire rear projection market started to fall regardless of what the light source was. LED screen sizes grew and the prices dropped very quickly. You could buy a 50-inch LCD television. All of Asia was building massive fabrications and investing billions of dollars into the industry. The industry grew up on slim margins, so everything was built around driving the price down, which they did by about 50% in just 18 months.

We went to production and sold 100,000 PhlatLights, which was a nice chunk of revenue for a company at our stage. Being a supplier to a company like Samsung, we had to grow up quickly in terms of a manufacturing operation. In the course of a year we had to become an ISO-qualified, high-caliber worldwide manufacturing organization.

This segment is part 4 in the series : Luminus Devices Founder and Chief Technology Officer Alexei Erchak
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