The race to produce blue laser diodes has just accelerated. Durham, N.C.-based Cree Research Inc. has formed a strategic partnership with Microvision Inc. of Seattle, developer of virtual retinal display technology, to develop blue and green laser diodes and edge-emitting light-emitting diodes. The light sources could be used for proposed scanned beam display systems.

Under the agreement, Microvision will fund a $2.6 million program, with an option for a one-year extension for $2.5 million, to develop the diodes. For its part, Cree has invested $4.5 million in Microvision's common stock.