This is a larger workforce than what the company maintains anywhere else in the world, and roughly half of it is employed in China, according to public information from the company.

Some analysts say Osram's quick move to build an LED plant in China is designed to pave the way for its planned listing, which was put on hold by Siemens in September of last year, citing unfavorable stock-market conditions.

However, others say the large and potentially lucrative LED-lighting sector in China and the Chinese government's requirement for increasingly high levels of localization are the key reasons.

Wang Fei, a Shenzhen-based analyst with LEDinside, a unit under the consulting firm TrendForce, says the Chinese government is still a key supporter of the growth of the LED-lighting industry in China.

"Meeting the government's requirements is crucial for companies to get orders in China as large projects, such as urban lighting, are government controlled. And like anywhere in the world, the government in China is in favor of domestic production," Wang says.

China's Ministry of Science and Technology released its first Five-Year Plan for the semiconductor lighting industry (2011-15) in July, planning to have 80 percent of LED-lighting chips produced locally by 2015.

The current oversupply in China's LED lighting market has already burdened local producers, and the increasing number of foreign players has also raised concerns about intensified competition.

In an annual LED-lighting forum in Guangzhou in August, this year's theme was an LED world war, during which international companies were referred to as invaders.

mengjing@chinadaily.com.cn