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Over the past decade, advances in LEDs have enabled the potential for wide-scale replacement of traditional lighting with solid-state light sources. If LED performance targets are realized, solid-state lighting will provide significant energy savings, important environmental benefits, and dramatically new ways to utilize and control light. In this paper, we review LED performance targets that are needed to achieve these benefits and highlight some of the remaining technical challenges. We describe recent advances in LED materials and novel device concepts that show promise for realizing the full potential of LED-based white lighting.