LEDs are mainly used in street lighting

Foreign lighting titans including Philips Electronics NV (PHG.AS), Osram - partly owned by German engineering conglomerate Siemens AG (SIEGn.DE) - and General Electric Co (GE.N) should emerge as winners due to their financial clout and technical expertise, industry experts say.

Philips and Osram, which have traditionally focused on conventional lighting in China, have ramped up production of LED high bay light. Osram, which employs 8,000 people in China, started construction of its first-ever LED chip packaging plant in China in August, a 100,000-square-metre complex in the eastern city of Wuxi, using chips made in Germany and Malaysia.

LEDs are mainly used in street lighting, shopping malls, upscale hotels and office buildings. To accelerate a broader shift to efficient lighting, China in October started to phase out wasteful incandescent bulbs, joining other countries like the United States and Japan.

The diodes, semiconductors that convert electrical current into light, are much more efficient than the two dominant products for home and commercial lighting, compact fluorescent lamps (CFLs) and incandescent bulbs. LED lights are longer lasting and up to 10 times more efficient than incandescent bulbs.