8 April 2020
BluGlass reports progress in Laser Diode business and micro-LED and LED programs, and cost saving for 2020
BluGlass Ltd of Silverwater, Australia (which was spun off from the III-nitride department of Macquarie University in 2005) has presented an operational update to shareholders, detailing recent developments in its direct-to-market Laser Diode business unit (launched last October), recent progress on its micro-LED and LED programs, and cost-saving measures for the remainder of the 2020 financial year.
BluGlass is developing and commercializing RPCVD as a low-temperature, ammonia-free alternative to traditional manufacturing technologies. RPCVD is said to offer electronics manufacturers performance advantages including higher-performing, lower-cost devices. The firm recently demonstrated patented ‘active as grown’ RPCVD tunnel junctions for LED wafers, which provide a solution for the challenge of efficiency droop by combining multiple LEDs in a single vertical LED stack (with the potential to generate greater light output for less power).
Technology update: Laser Diode development progress
BluGlass has engaged with prospective laser diode customers to develop bespoke designs for a range of end-product applications from industrial cutting and welding to biomedical devices.
Current customer engagement programs include verified optical designs of standard laser diodes that the firm has successfully modelled and simulated. The technology team has also delivered promising epitaxial results with the implementation of several design improvements. BluGlass expects to deliver laser diode products to customers for testing by the end of this calendar year.
The firm has also processed new remote-plasma chemical vapor deposition (RPCVD) tunnel-junction laser diode test structures demonstrating good initial performance. These novel tunnel-junction laser diode structures successfully replace the heavily lossy and resistive p-AlGaN cladding layers needed in standard laser diodes, says BluGlass. By adding an RPCVD-grown tunnel junction, the p-type layers can be replaced by significantly less lossy and resistive n-type device layers, paving the way for significant performance improvements with reduced optical loss in laser diodes.
The initial device structures confirm the viability of these RPCVD-grown n-type layers for tunnel junction laser diode applications. Further work is ongoing on development of the laser diode tunnel-junction layers’ initial performance.
RPCVD tunnel junctions offer performance and cost advantages for the manufacture of high-brightness GaN laser diodes, says BluGlass, including higher-performing devices with reduced optical loss as well as productivity and cost improvements.
BluGlass has published a technical explainer document on the performance advantages of RPCVD for laser diodes that can be download from www.bluglass.com.au/laser-diodes.
Laser diode test facilities
The BluGlass US-based Test Facility is on track for completion and full operation in June. It will provide the firm with the flexibility to test laser diode chip, bar and packaged devices across a variety of product wavelengths. The capabilities enable initial R&D testing during product development but will ultimately enable fully automated testing of commercial volumes of the laser diode products.
The laser diode product development roadmap remains on-track to deliver repeat customer revenues anticipated to commence in early 2021.
BluGlass says that it continues to develop and strengthen its global supply chain in the current operating environment by working with and qualifying multiple partners on the fabrication of laser diode devices. Due to the current issues surrounding COVID-19 quarantine, several of its US fabrication suppliers have been temporarily closed or are operating on reduced capacity, however a primary supplier remains fully operational. To date, there has been only minor disruption to BluGlass’ critical product design activities. In preparation for potential impacts, discussions are underway with several backup suppliers.
BluGlass continues to advance its R&D on micro-LEDs, in particular its long-wavelength LEDs for red-green-blue (RGB) applications. The firm has recently demonstrated progress towards developing RPCVD-grown red LEDs.
Micro-LED foundry customer orders for the quarter have been impacted by COVID 19, with several customers currently on hold and unable to process and test devices. Despite the facility disruption, communication and preparation for the next design iterations and orders continue.
Cascade LED update
BluGlass has continued to demonstrate iterative improvements in the light output of cascade LED test structures using RPCVD tunnel junctions. The firm is waiting to process cascade LED chips to benchmark these latest developments, currently being fabricated overseas.
A new video showing sequential green and blue light emission from an RPCVD-grown tunnel-junction cascade LED is available to watch at www.bluglass.com.au/video.
One of the key limitations for the commercial adoption of the firm’s RPCVD tunnel-junction technology for traditional LED applications is the challenge of the added voltage from the tunnel-junction layers. BluGlass remains confident that further reduction of tunnel-junction voltage for traditional LEDs is achievable with additional development iterations.
However, this challenge is not as critical for cascade LED applications (two LEDs grown in a single stacked chip). The additional small increase in voltage is potentially negated by the performance improvements offered by cascade LEDs to address efficiency droop and drive smaller-form-factor, higher-efficiency LEDs.
BluGlass says it has made good progress in optimizing the key mechanisms required to drive individual LED performance (the top and bottom LEDs) in cascade structures.
Capital raise update
In March, BluGlass announced a non-renounceable entitlement rights issue on a 1-for-1 basis to holders of ordinary shares in the company held at 7pm (AEDT) on 27 March. All shareholders should now have received their personalised offer booklet.
Under the entitlement offer, eligible shareholders are invited to subscribe for 1 New Share at $0.02 for every 1 ordinary share held at the record date. The entitlement offer closes at 5pm (Sydney time) on 16 April.
Purpose of entitlement offer and use of funds
BluGlass intends to invest the proceeds of the entitlement offer as follows:
- ongoing development of the laser diode product pipeline and business;
- product development and testing to expedite delivery of laser diode products in selected markets;
- investment in sales and distribution channels for laser diode product launch in early 2021;
- continuing investment in specialist laser diode epitaxy and commercialization expertise;
- advance development with existing and potential new industry strategic partners, including LED, micro-LED and RPCVD market participants; and
- general working capital to enable ongoing execution of business strategy.
Directors and key executives will take up their full entitlement under the offer.
COVID-19 impacts: capital-preserving measures for the remaining financial year
BluGlass’ board and management say that they are committed to the delivery of key commercial and technical milestones despite the challenging operating environment impacted by COVID-19. Accordingly, they have implemented measures to conserve capital and maximize the firm’s development runway to deliver significant customer revenues and a meaningful return on investment for shareholders.
These measures include the BluGlass board taking 50% of its fees as shares until the end of the 2020 financial year at the current rights issue price of 2 cents per share (the proposed issue of shares to directors being subject to shareholder approval). The management team will also take 50% of salary as shares, with all other staff taking 25% of salary as shares for the same period. At the end of the financial year the board will reassess if a further extension of these measures is required.
BluGlass has also entered an R&D tax rebate financing agreement with Radium Capital that provides it with an immediate cash injection of about $1m. Early access to these funds will allow BluGlass to further strengthen its balance sheet and deliver its near-term milestones, say the firm. This a low-cost facility that has been put in place until the R&D tax refund is received from the Australian Taxation Office (ATO) in September.
In addition, management is working with the federal government and advisors on possible government assistance for the business in the current operating environment which could include:
- payroll tax relief of about $30,000, for 3 months up to the end of the year;
- PAYG tax relief of $100,000 ($50,000 available this quarter and $50,000 to 30 September);
- Job Keeper payments of $350,000 for 18 staff ($175,000 available this quarter and $175,000 next quarter).