Next time I hear Coldplay festively crooning "May all your troubles soon be gone, Oh Christmas Lights keep shinin' on," I'd like to think that far from lamenting some lost love, they're paying solemn tribute to the humble but illuminating LED.

The Light Emitting Diode celebrated its 50th anniversary this year. It's easy to forget LEDs have been around for so long, especially as they've become ubiquitous as cheap, energy-efficient sources of light in comparatively recent times.

Take those Christmas lights, for example. LEDs have almost completely replaced the tungsten bulbs we gazed at as children, and for good reason - they're up to 90 per cent more efficient, don't get dangerously hot on our tinder-flammable Christmas trees, don't need to be troublesomely filled with inert gas, and can last for up to 100,000 hours each.

The LED has become one of the most important electronic components in modern technology. The market for general lighting by LEDs is expected to be worth $19.5bn this year and reach $31.4bn by 2017.

General lighting accounts for just 35 per cent of the total LED market, though, with mobile devices - such as smart phones and tabs - accounting for 30 per cent.

Why has the LED proved quite so enduring and how much further can the minature glimmer go?

Any child with an electronics kit knows an LED is a semiconductor that lights up when you put it in a circuit the right way around. Ask why an LED works, and most people will probably mumble something about electroluminescence. But for those who haven't thought about the physics behind these things for some time, here's a very basic explanation of why they an LED makes light.

In each diode, two types of semiconductor material (such as silicon carbide or gallium arsenide) are bonded together. One half (n) is doctored to have extra electrons in it, and the other half (p) to have extra holes where electrons could be. The one-way boundary between the two is called a p-n junction.

When the diode is off, the extra electrons from the 'n' half neatly fill the holes in the 'p' half, forming what is called a 'depletion zone'. There are no free electrons, and charge doesn't flow.

If the diode is placed in a live circuit by adding a battery with its positive end connected to the free electron 'n' side of the diode, and the negative end connected to the extra holes 'p' side, things change. The 'n' side electrons are attracted to the positive electrode, and the 'p' side holes are attracted to the negative electrode.

No current flows because both the electrons and the holes are moving away from each other, and the depletion zone increases. This is the diode in reverse bias mode: it acts as an electronic valve by preventing current from flowing in a particular direction.

When you reverse the connections - by plugging the battery's positive end into the 'p' side and the battery negative terminal into the 'n' side of the LED - the electrons in the 'n' material are drawn towards the depletion zone and meet holes coming the other way from the 'p' half. The diode is now in forward bias mode, current is allowed to flow in this direction, and light is emitted as a result of the electrons and holes combining in the middle of the device.

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Cat's whisker electroluminescence was discovered as a phenomenon as far back as 1907 by Marconi's Henry Round, the first studies of embryonic LEDs were recorded by Oleg Vladimirovich Losev in 1928, and Rubin Braunstein discovered infrared from gallium arsenide at RCA in 1955.

But the "invention" of the LED is generally attributed to GEC researchers Robert Hall and Nick Holonyak in late 1961. At around the same time, Bob Biard and Gary Pittman were making similar breakthroughs at Texas Instruments, as was Marshall Nathan at IBM, and Robert Rediker from MIT.

It was Texas Instruments that secured the first patent the following year though, and the first commercial LED - known as the SNX-100 - was sold in 1962. IBM used them to replace the hot tungsten bulbs in their punched card readers.

The first visible light LEDs were red. Brighter, yellow versions followed a decade later in 1972. Basic blue versions were created in Japan in 1979, but didn't prove commercially viable until the 1990s. Thomas P. Pearsall began developing high-brightness LEDs for use with fibre optics in 1976.

By the 1980s computer companies such as Hewlett-Packard were developing LEDs bright enough to replace the traditional incandescent bulb in applications from digital clocks to car brake lights.