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what now makes LEDs suitable for illumination applications?

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Early LEDs, such as those often used as indicator lights on electronic equipment, created very narrowband, but not quite monochromatic light ranging in color from yellow-green to red. But it was not until the development of AlGaInP and InGaN LEDs with much higher light output than the early indicator lamps, that useful quantities of light could be generated from LEDs. In addition, these materials allowed, for the first time, LEDs with peak wavelengths at any part of the visible spectrum to be made. White light can be made by mixing light from different parts of the spectrum (see also How is white light made with LEDs?).

Larger devices and packages have increased the overall light output of LEDs to levels that are useful for some lighting applications. In addition to increased size of the semiconducting elements, LED construction has also changed to make them more efficient. The crystals forming early LED junctions were grown on light-absorbing substrate materials. Using transparent substrates and optimizing the shape of the semiconducting element have increased the amount of light able to leave the device, as shown in Figure 3.

Figure 3. Improved design of LEDs to increase efficiency.
The substrates are shown as shaded areas. Early LEDs used light-absorbing substrates (left); later, transparent substrates were developed that permitted light to be emitted in additional directions (center); subsequent shaping of the semiconducting elements (right) has resulted in improved efficiency.