The LED light market is undergoing explosive growth. The technology has been in use since the 1960s, but 2010 is the year in which the technology is becoming mainstream.
This is stimulating investment in new technologies that will help make LED lights more attractive in performance and cost.
One Israeli start up in this field is Oree, which produces a flat casing that looks like a credit card for several kinds of lights. Today, Oree announced a strategic investment by Taiwanese LED chip producer Epistar. The amount of the investment is only $2-3 million, but sources inform "Globes" that this is just the first part of a financing round amounting to about $15 million that Oree plans, and which will include its existing investors. So far, Oree has raised $16 million from Genesis Partners and GIMV, as well as obtaining loans from Silicon Valley Bank and Kreos Capital.
Oree was founded in 2004 by its CEO Eran Fine. The company offers the LED (light emitting diode) world a special package based on optics technology.
LED lights, which produce light by an electronic component (semiconductor) rather than by emitting heat as in a conventional light, are considered more economical than the latter, having a lifespan up to 100 times longer, and being more robust, and more efficient as alighting source. The chief disadvantage of these lights is the high cost of producing them, since the process is similar to that of producing semiconductors.
Investment bank Lazard estimated at the beginning of the year that the LED market this year would be worth $7.7 billion, representing growth of 20%. The main driver of growth currently is high demand for LED-based televisions, the market for which will total $1.3 billion this year, according to Lazard, more than five times sales last year. This is expected to create a shortage of LED lights in 2011-2012.
The investment by Epistar, Fine explains, is not just financial. Oree needs LED lights, or chips if you will, as raw material for its product, and the high demand for the new lighting technology presents the company with a problem. "We need the money essentially in order to buy a large quantity of LED lights. The agreement also gives use relatively easy access to these chips," Fine says.
For most of its existence, Oree's activity has been in the area of illumination for flat-screen televisions, for which it offered a planar LED light source up to four times more efficient than conventional LEDs. However, the company has changed its focus. "We discovered that they really want us in the lighting industry," says Fine, and adds that the company has already made initial sales in this field.
Published by Globes [online], Israel business news - www.globes-online.com - on August 12, 2010
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