Byline: Kausik Datta

MUMBAI: The Videocon group, the country's largest consumer electronics maker, has received an aid of e180 million (around Rs 1,150 crore) for setting up a $1.5 billion semiconductor facility in Campania region of Italy.

The group expects to get further e100

Digital Display Devices (DDD), a part of the group, plans to set up facility for production of the LCD panels and their partial assembly into modules for flat screen TV sets and computer monitors in three years. On completion, it is expected to add $1 billion to the company's topline with a 25% EBITDA margin.

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The company will be the first producer of liquid crystal display (LCD) panels in European Commission Area (ECA) which now imports them from Japan, Korea, China and Taiwan. It is expected to create direct employment of 1,000 in one of the poorest regions in Italy.

DDD will mainly export the LCD panels. It will also sell a part of its products in the ECA. Sources close to the development said Videocon will invest e300-400 million while the remaining fund will be borrowed for setting up of the facility, which will come up near to Thomson's facility at Anagani in Italy. Videocon bought Thomson SA's global colour picture-tube manufacturing business for Rs 1,260 crore in 2005. Thomson in turn invested nearly Rs 1,200 crore to pick up a 14% stake in Videocon Industries and Rs 80 crore for 12.5% stake in Videocon International.

Sources said the size of the semiconductor industry is estimated at $25 billion and is growing at 50% a year. It is expected that the industry would double in 2012.

Videocon is also planning to set up LCD making facility in Navi Mumbai with an investment of Rs 8,000 crore.

Meanwhile, Videocon has submitted an expression of interest in acquiring Motorola's mobile phone operations early April. It has appointed UBS AG to advise it on the bid.

Motorola's handset unit is estimated to be around $3.8 billion, according to an estimate of Merrill Lynch. The acquisition may take a year to complete because it requires US regulatory approval.