China's LED industry brightens up

China's growing demand for greener illumination gave the country's light emitting diode (LED) makers an easy time this year with good profits in the first half of 2014.

Of 38 listed LED makers to publish semiannual financial results, 31 reported improved performance. The net profits of 12 companies grew by more than 50 percent.

HC SemiTek Corporation, which posted a 215-percent profit growth, attributed its success to demand for LED chips, a device to control LED lights and screens.

LEDs are usually lights that are more energy-efficient than incandescent bulbs. China is the world's largest LED producer with a large number of companies, mostly small firms, in the business, the high price of LED bulbs means that they are not all that popular in China, especially in the countryside.

Huge production capacity and a relatively small domestic market means the LED industry is highly reliant on overseas markets. Some analysts fear that LED companies may face similar problems to PV producers.

A silver lining came when China released a plan in 2011 to phase out incandescent illumination to raise energy efficiency: imports and sales of 60-watt and above incandescent bulbs will be prohibited on October 1.

In addition, China started to subsidize LED lights last year and encouraged schools, shopping malls and hotels to install them.