SEOUL Feb 17 (Reuters) - Samsung Electronics (005930.KS) and its component affiliate will set up a light emitting diode (LED) venture, a move to boost its presence in the rapidly growing market for energy-efficient lighting technology.
LEDs consume less power and last longer than traditional light sources and are increasingly used in products from mobile phones to flat-screen televisions.
Leading players in the LED business include Philips (PHG.AS), Toshiba Corp (6502.T) and Siemens' (SIEGn.DE) unit Osram. In South Korea, LG Group's LG Innotek (011070.KS) is also expanding its LED business.
Samsung said the global LED market was expected to grow by about 20 percent annually over the next five years, from $5.2 billion in 2009 to $12.7 billion in 2013, citing research firm studies.
Samsung and its affiliate Samsung Electro-Mechanics (009150.KS) are to set up the 50-50 joint venture, tentatively named Samsung LED, by April, Samsung Electro-Mechanics said in a statement on Tuesday.
Shares in Samsung Electro-Mechanics jumped briefly on the news, rising as much as 4.3 percent. Its shares ended down 0.47 percent, still beating a wider market .KS11 that lost 4.11 percent. Samsung Electronics fell 2.68 percent.
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 statement said.
The cooperation would also help Samsung Electronics' drive in LED TVs, it said.
(Reporting by Rhee So-eui; Editing by Marie-France Han and Ken Wills)
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