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Abstract Bandgap engineering plays a critical role in optimizing the electrical, optical and (photo)‐electrochemical applications of semiconductors. Alloying has been a historically successful way of tuning bandgaps by making solid solutions of two isovalent semiconductors. In this work, a novel form of bandgap engineering involving alloying non‐isovalent cations in a 2D transition metal dichalcogenide (TMDC) is presented. By alloying semiconducting MoSe₂with metallic NbSe₂, two structural phases of Mo_0.5Nb_0.5Se₂, the1Tand2Hphases, are produced each with emergent electronic structure. At room temperature, it is observed that the1Tand2Hphases are semiconducting and metallic, respectively. For the1Tstructure, scanning tunneling microscopy/spectroscopy (STM/STS) is used to measure band gaps in the range of 0.42–0.58 at 77 K. Electron diffraction patterns of the1Tstructure obtained at room temperature show the presence of a nearly commensurate charge density wave (NCCDW) phase with periodic lattice distortions that result in an uncommon 4 × 4 supercell, rotated approximately 4° from the lattice. Density‐functional‐theory calculations confirm that local distortions, such as those in a NCCDW, can open up a band gap in1T‐Mo_0.5Nb_0.5Se₂, but not in the2Hphase. This work expands the boundaries of alloy‐based bandgap engineering by introducing a novel technique that facilitates CDW phases through alloying.