UPDATE 1-Samsung, Sumitomo in $72 mln LED wafer JV

* Samsung, Sumitomo in $72 mln LED wafer venture

* 50/50 venture to start production from early 2012

* Samsung sees LED wafers in short supply due to strong LED

(Adds details, background)

SEOUL/TOKYO, March 28 (Reuters) – Samsung LED and Japan’s
Sumitomo Chemical have agreed to set up a 80 billion
won ($72 million) joint venture in Korea to produce sapphire
substrates used to make light-emitting diodes (LED).

The move comes as global manufacturers from electronics
firms to carmakers seek to diversify their supply chains after
the devastating earthquake and tsunami that hit Japan March 11
raised concerns that supplies of key components may be severely

U.S.-based Rubicon Technology Inc , a major LED
wafer supplier, said recently it was seeing increased demand for
substrates from Japanese customers after the earthquake.

Samsung LED, a joint venture between Samsung Electronics
and Samsung Electro-Mechanics Co Ltd ,
said the investment plan was not related to the earthquake and
was aimed at securing stable supply of wafers to produce LEDs.

“The venture will help Samsung enhance our LED
competitiveness by vertically integrating production of key
components, and will replace imports of such products,” Samsung
LED said in a statement.

LED technology is power-efficient and is widely used for
flat-screen backlights, interior lighting, traffic signals and
automobiles. It is poised to unseat incandescent and compact
fluorescent lightbulbs as governments, businesses and consumers
seek to cut electricity costs and curb emissions.

LEDs are manufactured by slicing sapphire ingots into thin
sheets that are processed into sapphire substrates, which are
then coated with a luminescent layer.

The venture, which will compete with major suppliers such as
Rubicon and Russia’s Monocrystal, will build a plant this year
and mass production will start from early 2012, Samsung LED

The market for LED wafers is seen growing nearly 70 percent
to $927 million this year and to $1.3 billion by 2021, according
to research firm Displaybank.

($1 = 1111.050 won)

(Reporting by Ju-min Park in SEOUL and Isabel Reynolds in
TOKYO; Writing by Miyoung Kim; Editing by Jonathan Hopfner)

UPDATE 1-Samsung, Sumitomo in $72 mln LED wafer JV