Sharp has begun mass production of blue laser diodes – the critical component in rival next-generation DVD systems – in a move that is expected to escalate the “format war” between Blu-ray Disc and HD-DVD players.
The LEDs are used by both competing formats to read and write data on to discs, but production has been dogged by bottlenecks, seriously delaying the availability of the players.
The new standards are expected to generate billions in revenue for the technologies’ backers – led by Sony in the case of Blu-ray and Toshiba for HD-DVD – as well as Hollywood studios, the consumer electronics industry and retailers.
Early manufacturing problems with blue LEDs were blamed for the acute pre-Christmas shortages in the US and Japan and delays in the European launch of Sony’s PlayStation3 games console, which incorporates a Blu-ray Disc player.
Sharp began production of blue LEDs at its electronic components factory in Hiroshima in late November.
The line is able to make 150,000 units a month but Sharp expects to increase that to 500,000 units a month by the end of next calendar year.
Sharp has invested “several billions of yen” in the blue LED plant and, although it does make its own Blu-ray Disc recorder, it initially expects to use only a small proportion of the LED output for its own purposes.
“Most of the diodes will be available and sold on the open market to producers of both the Blu-ray Disc and HD-DVD formats,” the company said.
The blue LED market has been dominated by Nichia, which produces about 1m diodes a month.
Sony has its own production facilities capable of churning out 1.3m units a month, but the entire line is currently being used to meet the needs of its PS3 production, a situation expected to last well into next year.
Toshiba, which with Microsoft is leading the battle against Blu-ray, does not produce blue LEDs of its own and has been relying on Nichia’s.
Industry observers said that Sharp’s move, which smashes the blue LED duopoly of Sony and Nichia, would probably spark a price war in the technology. Prices have already dropped from Y8,000 ($68) a diode to about Y3,000 since January and could, say analysts, halve again by the end of 2007.
By forcing blue LED prices lower, said one analyst, the next-generation machines that use them could be produced more cheaply and should enter consumers’ homes more quickly.
Sharp is a member of the Blu-ray Disc consortium but it admitted that its move could be a boon to competitor members of the HD-DVD group.
