It's said that Taiwan silicon foundry giant Semiconductor Manufacturing Co. (TSMC) will license LED patents from Philips when its LED factory starts pilot production at the end of 2010.

According to the company, it began the construction in March 2010, with first-phase project scheduled to be completed and tooled by the end of 2010 at a cost of around NT$5.5 billion (US$177 million). Volume production will not kick off until Q1 of 2011.

Desite some institutional investors said the No.1 pure silicon foundry would license LED patents from Philips, TSMC executives stressed that it will develop patented technologies on its own and Philips is simply a perspective customer.

Once the reports are proven true, TSMC will become the second Taiwanese LED maker to license technologies from Philips afterEpistar.

The company will put brand names on its modules, otherwise known as light engine or light source for lighting fixtures.

In addition, TSMC will set aside US$100 million from its 2010 capital expenditure of US$5.9 billion to finance its LED and solar-energy business.