Nichia's and Sony's collaboration announced in December 2002 will result in making Sony the second supplier of blue-violet laser diodes. Since then the two companies have been working together to develop the laser technology while deciding on what form of partnership they would form. Along with a cross-licensing deal, they also considered a joint venture. The cross-licensing deal involves the exchange of about 500 patents by Nichia and about 300 from Sony for optical disc recording/playback usage. At the same time, the two companies will compete against each other in the laser market.

Nichia has developed its own short-wavelength lasers ranging from violet, blue to green. The laser diode with 405-nm wavelength is a key component of the Blu-ray disk system and XDCAM, Sony's professional disc recording system. Sony said it intends to offer the 405-nm laser to Blu-ray disk users as well as for internal use.

The jointly-developed diode for optical-disk applications is planned to be availabe to customers this summer.