“LEDs can be used anywhere light is needed,” said Ted Huang, CEO of Allray Inc. “Even if they are used to replace only the millions of general-purpose illumination lamps, there will be an immeasurable market potential.” He estimated that LEDs would represent a $50-billion market worldwide and a 60-billion-yuan market in China by 2010.

He pointed out that China’s LED industry is in a period of steady growth, as evidenced by the jump in annual revenues from 12.5 billion yuan in 2004 to over 25 billion yuan in 2005.

Huang formerly was an LED researcher at the State University of New York. Resigning his post as the chief scientist at a flight research center under the U.S. National Aeronautics and Space Administration, he returned to China with a group of U.S.-educated doctors several years ago and established Allray Inc. in Jiangsu Province.

Developing and producing world-class optoelectronic equipment, the company is among the leaders of China’s LED industry, boasting a considerable

 profit margin. A company executive estimated the firm’s annual revenues at more than 500 million yuan given normal operations of its market-ready projects.

Outdoor decorative lighting accounts for almost a quarter of China’s LED market, which was worth $1.4 billion in 2004. In southeast China’s Fujian Province, the consumption of white LEDs is running at 500 million units a month.

The 2008 Olympics to be held in Beijing and the 2010 World Expo in Shanghai have given the Chinese opportunities to show off their cities to foreign tourists. This eagerness is expected to provide an impetus to LED technology’s application in landscape lighting.

Given the fact that 10 percent of the lights in the Beijing subway system have to be replaced every year, maintenance costs will surely be cut if long-lasting LED lights are used instead.

Today, billboards in Chinese cities are mostly illuminated by spotlights that cast extremely strong light on the signs. Since they don’t depend on reflected light, LED devices will prove to be a better choice for advertisers.

According to a report released by China’s national coordination team for the LED lighting project, urban landscape lighting will comprise a 20-billion-yuan market by 2008, becoming the biggest area for LED application.

However, backward technology constitutes a stumbling block for the development of China’s LED industry, according to some insiders.

Huang considers China’s LED industry to be at the “fledgling stage” compared with countries and regions where the industry is relatively developed, as it lags far behind in terms of technology, size and production capacity. “The annual turnover of the LED industry on the Chinese mainland is about $1.5 billion, less than half the 2004 figure in Taiwan of $3 billion, and even less than that of a single Japanese company in 2004 of $2 billion,” he said.

Despite this, many Chinese optoelectronic companies like Allray have made up their minds to work their way up the value chain. Faced with the harsh reality that many LED products, high-end ones in particular, still have to be imported, an increasing number of Chinese companies vow to overcome that deficiency.