The light source in Jin Bingguo's hand is only 6 mm across. Once turned on, it emits a bright light that is almost dazzling. This is the flagship product of Kim Jong-il's start-up company, Soraa, which today emerges from stealth mode with over $100 million in venture capital support. It represents a new approach to LED lighting, a promising technology whose high cost has been a barrier. Soraa has developed its unique process for creating LEDs that increases the amount of light produced by using more material. The Fremont-based company plans to begin shipping bulbs this quarter, targeting businesses such as hotels and retail stores. Like other LED lights, Soraa's will be expensive—at least initially. Jin, the company's CEO, would not disclose specific prices but said they would be under $25. Jin says that the bulb's 25,000-hour lifespan and low energy consumption—approximately one-quarter of what an incandescent bulb uses—will quickly offset the initial cost. He expects costs to drop rapidly as Soraa scales up production. "If you're a restaurant or hotel, you can have this thing on 24/7 for 16 hours a day," Jin said. "If they can buy our bulb for less than $25, the payback period is less than a year. At that price point, it's a no-brainer." Other LED companies have already offered similar bulbs that mimic the halogen lights popular in businesses. But these bulbs are more complex, requiring multiple diodes to produce the same amount of light that Soraa's single diode can generate. Some competing bulbs even have small fans for heat dissipation. Once limited to digital watches, LED lights for homes and businesses have been around for years. They last longer than spiral energy-saving lamps (compact fluorescent lamps), work with dimmer switches, and provide a bright, warm glow. However, few consumers are willing to buy bulbs that typically range in price from $20 to $40. "LEDs simply aren't competitive in the consumer market until prices come down," said Edwin Mow, an analyst with investment banking and asset management firm Needham & Co. "Many people cite around $10 as the tipping point in the industry." Therefore, Soraa will target businesses first instead of jumping directly into the consumer market. Soraa's first bulb is designed to replace a specific type of halogen lamp, the MR16, used in restaurants, retail venues, and some home track lighting systems. The company was founded in 2008 by researchers at the University of California, Santa Barbara, who invented the first high-brightness blue LED in 1993. One of them, Shuji Nakamura, was part of a trio approached by Silicon Valley venture capitalist Vinod Khosla, who suggested forming a company. "I wanted the founders of UCSB research to do something that could open up and really make an impact," Khosla said. The company started in Goleta (Santa Barbara County) and moved to Silicon Valley in 2010 to tap the area's talent pool. Soraa's small staff, now numbering about 140 people, occupies an unguarded office building near the Dumbarton Bridge, where there is both administrative offices and a small LED factory. The company's main innovation lies in its method of making LEDs. Most competitors grow gallium nitride crystals on a thin layer of sapphire. Soraa, whose name is derived from the Japanese word for "sky," grows gallium nitride crystals on a layer of gallium nitride—a technique the company calls "GaN on GaN." As a result, Soraa's crystals have far fewer defects than those grown on sapphire. Jin says they can handle more current and produce more light. "We think this is a pretty solid future, and it's the right path to take," he said. Khosla referred to his insistence that new energy-related technologies must be cheap to succeed. He sees potential here. "I'm optimistic that we have the technology needed to save 60% to 80% of the energy we use for lighting, without subsidies or asking consumers to accept a 10-year return," Khosla said. "This is exciting." In addition to Khosla Ventures, Soraa is supported by New Enterprise Associates and NGEN Partners. Related thematic articles: A word to describe Apple in China Copyright: Legal obstacles, retrieving files from Interstar Sony's annual loss soars, now expected to reach nearly $3 billion EU investigates Samsung's network patent licensing practices A word to describe Apple in China