To support the local LED makers in crucial patents, Taiwan government could invest in foreign LED companies or set up a large joint venture by coordinating local manufacturers to pool patents.

It has been recently proposed by The Bureau of Energy of the Ministry of Economic Affairs (MOEA) to help the island’s LED get out of patent domination of global industry giants. Held back by patent issues, Taiwanese LED manufacturers have been limited to ship products to China, where intellectual property (IP) protection measures are lax and futile, the officials said.

Taiwan has been the world’s largest LED supplier by shipment volume, filling 38% of the world market, and the second largest supplier by revenue. At present, upscale market is the urgent target of the LED industry on the island. Generally speaking, having patents reward suppliers with high profit margins in high-tech markets.

The primary difficulties plaguing the island’s LED industry include lack of crucial patents, weak international competitiveness, and excessive small-sized manufacturers, senior MOEA officials point out.

In response to the MOEA suggestion, however, local manufacturers hesitate about the joint venture plan as many fear such cooperation would mess up their own cross-licensing scheme.

MOEA said the government aims to eventually grow the island into the world’s largest provider of LED light sources and modules.