Tsinghua Tongfang Co Ltd<600100>, a Beijing Tsinghua University-based enterprise engaged in the information and energy industries, announced that it plans to invest a total amount of RMB 500 million to set up Nantong Tongfang Semiconductor Co Ltd, sources reported.

The new company will be engaged in the production and development of LED modules and LED lighting products, and RMB 172 million will be invested to purchase facilities.

The Nantong project started construction in May 2010. Upon completion, the total production capacity of the Nantong project and another base in Shenyang of Liaoning Province will reach 10 million sets.

Reportedly, Tongfang will see a large improvement in the LED lighting business driven by its cooperation with Netherlands-based Royal Philips Electronics.

Separately, the company will sell an 86% stake in Tongfang Microelectronics Co to Tangshan Jingyuan Yufeng Electronics Co Ltd<002049> in exchange for shares in a private placement launched by Tangshan Jingyuan.