It’s reported that Samsung Group's LED business unit will begin operation in June with an initial target production of 120,000 LED panels. However, Samsung indicated that this production target is not big enough to challenge leading foreign makers in terms of market share. They expect the production capacity will be tripled by 2010.

Samsung Electronics said it will set up an LED production company in April by spinning off the LED business of Samsung Electro-Mechanics into a joint venture. The tentatively named Samsung LED will have initial capital of 290 billion won in the form of a 50-50 joint venture between Samsung Electro-Mechanics and Samsung Electronics.

Now, more and more LCD producers have been jumping into the LED segment to secure a supply of components. LG Electronics' flat-screen affiliate LG Display is increasing its investment in the field, while Taiwanese LCD makers, including AU Optronics and Chi Mei Optoelectronics have been investing millions of dollars.

LEDs consume less power than the current mainstream fluorescent lamps, or CCFLs, used in flat-panels. LEDs take up less space and are more environmentally friendly with no mercury content but their weak point are their high prices. The expert says with Samsung's investment size, it won't reach the necessary economies of scale.

According to a recent report, the sales of LEDs are about to boom as they improve in quality, and LED product sales will reach $22 billion in 2009 and $33 billion by 2013. The U.S. Department of Energy predicts that LEDs will be 70% of the lighting market in 20 years.