Based on a continuing influx of fresh funds, Taiwan is expected to keep its lead in the global rush toward the LED market in the coming years.

According to Semiconductor Equipment and Materials International (SEMI), the total investment in the Taiwanese LED industry will top US$600 million in 2010, the largest amount in the world.

Some heavyweight electronic firms such as the Taiwan Semiconductor Manufacturing Co. (TSMC), AU Optronics, and Chimei Innolux Corp. are steping into the LED sector.

TSMC is scheduled to complete the NT$5.5 billion first-phase engineering work for its LED R&D and manufacturing center by year-end and to begin mass production in Q1 of 2011, possibly with technology licensed by Philips.

It plans to create own-brand LED lighting sources and LED lighting engines on vertically integrated production lines which will also handle epitaxy production, packaging, and module making.

Due to the damand demand associated with the Chinese government`s plan to replace existing streetlights in major cities with LED lamps,some companies are setting up joint ventures with Chinese partners.

Moreover, some Chinese municipal governments are actively encouraging the development of the LED industry by subsidizing the MOCVD equipment needed for LED factories or directly investing in joint-venture LED producers.

On Oct. 4, Epistar`s board of directors decided to invest US$70 million in an LED joint venture with the China Electronics Corp. (CEC) in Xiamen to produce epitaxy, dies, LED lighting modules, and other LED products to fill the needs of flat panel display (FPD) factories, monitor producers, TV factories, and lighting plants. This is Epistar`s third LED joint venture in China,others are in Shandong and Jiangsu Province.

However, the lack of own brands is the major problem all the Taiwanese LED industry has to settle, according to SEMI.Therefore, Taiwan may lose its second-place (after Japan) global ranking in terms of value to South Korea in 2010. But it will still retain its top ranking in terms of output volume.