Citizen Holdings Co., a Japanese maker of watches and industrial machinery, plans to increase the number of research workers dedicated to light-emitting diodes as the devices replace incandescent bulbs in homes and offices.

The company will allocate almost half its research employees of about 200 to LED development as soon as possible, rising from 10 percent now, Mitsuyuki Kanamori, who was appointed president of Tokyo-based Citizen on April 1, said in a Bloomberg Television interview broadcast today.

Citizen, whose diodes are mostly used for mobile-phone backlights at present, plans to refocus its LED operations on lighting fixtures. LEDs, which are brighter and more energy efficient than incandescent bulbs, will replace standard lamps from 2010, according to industry researcher iSuppli Corp.

The company plans to combine with Citizen Technology Center Co., its research division, from July 1 and is reconsidering its development priorities, Kanamori said, without specifying details.

Citizen entered into a cross-shareholding agreement with Tokushima, Japan-based Nichia Corp. in October to secure supply of LED components and access to the company's patents in anticipation of rising demand.

Sales at Citizen's electronics devices business, comprising LEDs, backlight modules and quartz crystals used in watches, totaled 99.2 billion yen ($974 million) in the year ended March 2007, or 29 percent of the company's total.

Revenue in the global LED market will almost double to $12.3 billion in 2012, from $6.17 billion last year, on demand for the diodes used in liquid-crystal display backlights and as illumination in cars, homes and businesses, iSuppli said.