By Mark Halper
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.
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."
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:
- Honda to recycle rare earth metals, first time in history
- Philips CEO: LED bulb prices must fall to 'well below $10"
- The two-timing white knight of U.S. rare earth metals
- Toyota breaks out of China's rare earth shackles
- Why safe nuclear will rely on rare earth minerals
- America’s rare earth independence
- An LED rarity
Apr 22, 2012
Just like Sony emerged contrastingly with quality products at a time when Japanese goods were quite cheaply made, who, if anyone, will be the "Sony" of China? Or, is a super-quality consumer product from China impossible now because they have all stabbed each other in the back so many thousands of times and ground the workers into the dirt so hard that it will always be a source of commodities? Is the baton of quality is still lying in the road of time near the corpse of Sony? Will it be picked up by another?
At the end of the day, these trade games have a way of backfiring. I'll bet that there must be some items that would seriously affect the Chinese should some of their rare earth customers decide to play the same game. Just saying ........
This similar to the Pre WWII Japanese taking over rubber production. When the war started for the US, we had shortages of rubber and we over came that by making a rubber substitute. What helped win the war against the Japanese was that the US could build efficient and effective ships and planes at a cost of replacement less than Japans'.