Industry sources said due to sapphire substrates already having a high degree of stability and good mass production equipment, silicon substrates won't be used in the short term but are expected to be used for mass producing LED chips by next year.

International firms such as Cree and Osram have begun using silicon substrates and Taiwan Semiconductor Manufacturing Company (TSMC) is partnering with American LED manufacturer Bridgelux in order to mass produce LED chips on 8in wafers by 2013, according to sources.

Bridgelux said that while at present silicon substrates are more expensive, 75 percent of production costs for mass producing LED chips on 8in silicon wafers will be cut by 2013.

In addition, Taiwan LED manufacturer HPOled noted that heating dissipation of silicon substrates is four times quicker than that of sapphire ones and that it can increase luminous efficiency by 20-30 percent. The company also said that the lumen amount and lifespan will double as a result of the transition, and the difficulty of LED packaging can be eased as well.