While the prospect of selling their products abroad seems dim to many domestic LED makers that lack patented core technologies, Fujian Wanbang Optoelectronic Technology Co Ltd could have a bright future due to "new breakthroughs" in chip-related research.
Results were recently announced that can "effectively" clear barriers that have long hindered the industry, said He Wenming, board chairman of the company.
The new technologies solve heat problems while lowering costs and improving the lifespan of products, He said.
Compared to conventional bulbs, LED lamps can reduce energy consumption by 90 percent and even offer further reductions of 50 percent over the energy-saving lamps on the market today, he added.
Yet high temperatures affect the lifespan of chips, so heat dissipation is a big challenge for LED encapsulation companies.
He said Wanbang has developed a hollow structure to help diffuse heat through convection.
The company also found a new material to replace silver-gilt brackets that are currently used in most LED lights, he said.
Traditional brackets often turn dark after pronged heat exposure, which then affects illumination. The new material can solve the problem, the board chairman said, though he refused to reveal details.
He said his company is now applying for patents - including more than 100 international filings through the Patent Cooperation Treaty - for the inventions. Before the patents are granted, he is cautious about revealing too much.
The Putian-based company has also refined the industrial glue used for encapsulation. The technology will be kept secret and not disclosed even through patent documentation, He said.
A veteran inventor with scores of patents, He said Wanbang's innovations are mostly due to the company's second-largest shareholder - Castech, a listed high-tech firm backed by the Fujian Institute of Research on the Structure of Matter, a member of the Chinese Academy of Sciences.
He said when Wanbang hits new technological problems in production, Castech joins the research.
The cooperation is "no doubt mutually beneficial", he said.
With such a strong R&D team, He is optimistic about his company's prospects.
He said Wanbang will expand production, with Hong Kong's ASM Pacific Technology Ltd - the world's largest maker of LED production equipment - custom designing machines for the mainland company.
Another Putian-based LED company, Fujian New Century Electronic Material Co Ltd, has also focused on improving the thermal performance of LED components, for which it has filed more than 10 patent applications.
Its pursuit of new technology has won the trust of users. Liu Rongguang, president of the company, said New Century has secured orders from Apple, LG and Samsung.
It provides parts for the iPad2 and iPhone, said Wu Zhaojun, assistant general manager of the company. Orders for parts in the new iPhone5 were signed with New Century in July, Wu said.
Mainland companies are comparable to their Taiwan peers in technology and production facilities, said Wu, a management expert from the island, which is known as an electronics manufacturing center.
Yet there is still much room to improve in work attitude and production accuracy on the mainland, he noted.
Currently there are more than 3,000 LED companies in China. Most of them are involved in midstream businesses - such as encapsulation - or at the low end of the industry chain in lighting applications.
Globally, LED encapsulation products were valued at 85.8 billion yuan ($13.45 billion) in 2010, according to a report by the Gaogong LED Industry Research Institute.
China produced 31 percent of the total, followed by Japan with a 26 percent share and South Korea with 14 percent.