South Korean electronics giant Samsung Electronics Co. is reportedly setting up a 50-50 joint venture with its affiliate Samsung Electro-Mechanics to jointly produce LEDs. It’s disclosed the veture is tentatively named Samsung LED.

LEDs are known to have many advantages to traditional light sources, such as low energy consumption, longer lifetime, which are increasingly used in products from mobile phones to flat-screen televisions.

Leading players in the LED business include Philips, Toshiba Corp and Siemens' unit Osram. In South Korea, LG Group's LG Innotek is also expanding its LED business.

Samsung said the global LED market was expected to grow by about 20% annually over the next five years, from $5.2 billion in 2009 to $12.7 billion in 2013.

Samsung Electro-Mechanics, which runs an LED business that focuses more on LEDs used in mobile phones, said the venture would grow the business in the area of lighting and backlight units used in displays. As the manufacturing process for LEDs is similar to that of semiconductors, the joint venture would benefit from Samsung Electro-Mechanics' LED technology and Samsung Electronics' chip making capabilities, the company said. In addition, the cooperation would also help Samsung Electronics' drive in LED TVs.