Recently, GaN-based light-emitting diodes (LEDs) have found many applications, including automobile headlights, full-color displays, traffic light lamps, and solid-state lightings. However, the light extraction efficiency of GaN-based LEDs is limited by the total internal reflection of light at the interface between the LED structure and air caused by the large refractive index difference between the GaN film (n=2.5) and air (n=1). Photons with an incident angle lower than the critical angle of 23° are reflected from the interface, leading to low light extraction efficiency. Although the light extraction efficiency has been increased by using indium tin oxide (ITO) as a transparent conducting layer (TCL), further improvements in the TCL performance and the optical output power are still required to realize high efficiency LEDs. In this study, we demonstrate that the ITO layer with Ag nanoparticles can be used as an optically and electrically high performing TCL for LEDs. The transmittance of the ITO layer was improved by the resonance between incident light in the ITO layer and localized surface plasmons (LSPs) at the ITO-Ag interface. The optical output power and electrical characteristics of LEDs were improved by the Ag nanoparticles deposited on the ITO layer of the LEDs. Figure 1(a) shows a schematic diagram of blue LED with Ag nanoparticles deposited on ITO TCL. The LEDs with a blue emission at 465 nm were grown on a c-plane (0001) patterned sapphire substrate by metalorganic chemical vapor deposition. After growth of a GaN nucleation layer, a 2 μm-thick undoped GaN layer and a 2 μm-thick n-GaN layer were grown at 1025 °C. Then, multiple quantum wells, consisting of five periods of undoped InGaN wells and GaN barriers, were grown at 750 °C, followed by growth of a 200 nm-thick p-GaN layer at 980 °C. To fabricate the LEDs, the p-GaN layer was etched by an inductively coupled plasma etching process to expose the n-GaN layer for an n-type ohmic contact. Then, a 150 nm-thick ITO layer was deposited on p-GaN layer as a TCL by electron-beam evaporation. To investigate the effect of the Ag nanoparticles on the ITO layer, LEDs with Ag nanoparticles deposited on ITO layer were also fabricated. To form Ag nanoparticles, an Ag layer with different film thickness was deposited on the ITO layer by electron-beam evaporation, and then annealed at 500 °C for 1 min in a rapid thermal annealing (RTA) system. This was followed by deposition of Cr/Au on the n-GaN layer to form an n-pad electrode and on the ITO layer to form a p-pad electrode. Figure 1(a) also shows atomic force microscopy (AFM) image of the ITO layer with Ag nanoparticles after RTA processing. The surface of an as-deposited Ag layer on the ITO layer is smooth and featureless. However, the thin Ag layer is transformed into nanoparticles, and the particle size is increased by thermal annealing via the Ostwald ripening process. Figure 1(b) shows the optical output power of the blue LEDs with different density and size of Ag nanoparticle deposited on the ITO TCLs as a function of injection current. As shown in Fig. 1(b), the optical output powers of the LEDs with Ag nanoparticles on top of the ITO TCL are higher than that of the LED with the bare ITO TCL. In particular, the optical output power of an LED with Ag nanoparticles (1 nm-thick Ag layer) is increased by 16% at an injection current of 20 mA compared to that of the LED without Ag nanoparticles and the enhancement is increased with increasing the density of Ag nanoparticles. This improvement is mainly attributed to the increased transmittance of ITO by the resonance of the light with the LSPs in the randomly distributed Ag nanoparticles. The electrical properties of the LEDs are also improved by the enhanced conductivity of the ITO TCL caused by the Ag nanoparticles. These results indicate that the Ag nanoparticles/ITO with high transmittance and low resistivity can be used as a high efficiency TCL for LEDs. Figure 1