Hyderabad: Indian consumer electronics and home appliances manufacturer Videocon Group plans to set up a semiconductor manufacturing unit costing Rs1,000 crore.
It plans to do this by leveraging liquid crystal display technology patents it bought from tech giant International Business Machines Corp last month, the chief of the durables company said.
“The chip making facility for thin-film transistor LCD panels is being planned in one of the Indian states and the investment will be minimum of Rs1,000 crore to begin with,” Venugopal Nandlal Dhoot, Videocon’s chairman and managing director said.
The project location and size will be finalized in six months and manufacturing will start two years from then.
Videocon is discussing the semiconductor project with the governments of several states including West Bengal and Andhra Pradesh and is looking for the best incentive package, Dhoot said at the sidelines of an industry meeting.
Late in February, the Union government decided it would support up to a quarter of capital expenses in semiconductor manufacturing projects through subsidies and tax breaks.
New Delhi expects two-three such facilities to be set up in India by global chipmakers in the next few years.
Videocon says it will export chips to other LCD makers Sharp, Samsung Electronics, LG, Philips Display. “The chip facility will not only cater to our captive consumption but also to growing global markets for LCD panels. We are expecting to achieve at least $100 million (Rs440 crore) exports from this facility per annum,” Dhoot told Mint.
Videocon is currently setting up a new LCD panel manufacturing facility in Italy at an investment of Rs6,100 crore with an annual capacity of 5.76 million displays. Videocon had established a strong manufacturing base in Italy through its acquisition of Thomson's television-making assets for $288 million in June 2005. These facilities include cathode ray tubes, colour picture tubes and plasma televisions.
The global thin-film transistor LCD market is expected to grow to $95 billion by 2010 from an nearly $70 billion in 2006.
Videocon is trying to cotton on to the growing demand for LCD and plasma televisions globally, an analyst said. “Videocon's chip facility not only suffices huge internal consumption requirements, but also enables it to cater to the growing global markets. Compared to Taiwan and China, where most of the LCD facilities are now located, India offers the advantage of low manpower costs,” said Y.S. Shashidhar, vice-president at consultant Frost & Sullivan.
The Aurangabad-headquartered durables maker, which already has a manufacturing facility on the outskirts of Hyderabad for consumer electronics and home appliances, will also set up a business park nearby focused on information technology.
The park will have about 1 million square feet built-up space to be leased out to tech companies.
“We have estimated the project cost to be around Rs 350 crore. The civil works for the infotech park have already started and it will be ready for occupation within two years,” Dhoot said.