Intelligent Energy

Philips developing rare earth substitute for LEDs, says CEO

Philips developing rare earth substitute for LEDs, says CEO

Posting in Energy

Fed up with China's grip on rare earths metals? You could file a trade action. You could also do what Toyota and now Philips are doing - innovate around the problem.

A bright idea from Philips: Innovate away from rare earths.

Philips CEO Frans van Houten revealed this morning that his company is developing technology that will reduce reliance on rare earth minerals vital to LED lighting products.

Rare earths are key in the industrial and consumer world, from everything to energy efficient light bulbs that cut carbon emissions, to iPhones to missiles. But China controls about 95 percent of the world's supply, which has led to pricing and availability challenges for the West.

While that has prompted World Trade Organization complaints by the U.S., Europe and Japan, it has also triggered innovation among companies like Toyota to move away from rare earth reliance.

Count Philips now among the innovators.

"We have launched some innovation projects in order to become less dependent on rare earths," CEO Frans van Houten said in conference call with analysts this morning to discuss first quarter financial results. "You cannot eliminate it of course. But in our labs we have been able to find a way to significantyly reduce the amount of rare earths that we need in order to make our products.

"So that, in the mid-term is good news. It will still take us a couple of quarters before that comes to bear ..But it's nice to see that when you put pressure on your organization they come up with creative ideas."

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More from me later on this. I have to leave my office for Parliament in a few minutes to discuss thorium -- the alternative nuclear fuel that's connected to rare earth minerals, so I'll hold off for now on diving into the many insightful details that van Houten revealed about LED sales and profits during the call. Some of his discussion circled back to the news I broke last week that Philips will start selling an LED bulb in Europe for less than €10.

Watch for additional details about Philips' LED business here tomorrow or later this week. I'll tell you this much for now: the company's LED financial situation is improving, but it still has a long way to go. News at 11, as they used to say.

More rarities and LEDs on SmartPlanet:

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Mark Halper

Contributing Editor

Mark Halper has written for TIME, Fortune, Financial Times, the UK's Independent on Sunday, Forbes, New York Times, Wired, Variety and The Guardian. He is based in Bristol, U.K. Follow him on Twitter. Disclosure