Wednesday 16 April 2008

Brussels, 16 April 2008

State aid: Commission endorses € 180 million aid to Digital Display

Devices (DDD) for large investment project in Campania, Italy

The European Commission has authorised, under EC Treaty state aid rules, € 180 million of aid granted by the Italian authorities to Digital Display Devices (DDD) for a new plant for the production of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels and partial assembly into TFT-LCD modules for flat screens for TV sets and computer monitors. DDD will be the first producer of LCD panels in Europe, as currently all TFT-LCD panels are produced outside the European Economic Area (EEA), mainly in the Far East. The project will create about 1000 new jobs in Campania, one of the poorest regions in Italy. The Commission found the measure to be compatible with  the requirements of the applicable Regional Aid Guidelines of 1998 and the rules for regional aid for large investment projects of 2002 (see IP/02/242) because it respects the relevant thresholds on market share and production capacity.

Competition Commissioner Neelie Kroes said “I am pleased to approve aid for an important investment project in an extremely dynamic high tech sector. The investment will lead to the first production of LCD panels in the EEA and contribute to regional development and job creation in a disadvantaged region.”

DDD's investment project is aimed at setting up a new plant for the production of TFT-LCD panels and their partial assembly into modules for flat screen TV sets and computer monitors. It involves eligible costs of € 900 million of which the aid amounts of € 180 million.

The plant will be the first in Europe producing TFT-LCD panels and the glass substrate which is needed to fabricate them. The plants currently existing in Europe assemble LCD panels imported from Japan, Korea, China and Taiwan into TFT-LCD modules.

The project is to be carried out in the region of Campania, a disadvantaged area with an abnormally low standard of living and serious unemployment, eligible for regional aid under Article 87(3)(a) of the EC Treaty. The project aims at creating about 1000 new jobs.

The aid is granted under a scheme previously approved by the Commission (see IP/00/757). However, due to the significant amount of aid involved, the aid to DDD had to be notified to the Commission for individual assessment and clearance, to ensure there were no undue distortions of competition.

The Commission’s assessment of regional aid to large investment projects focuses on the market power of the beneficiary and on the production capacity created by the investment on the European market. If the relevant thresholds are not exceeded, the effect of the aid on competition is deemed to be outweighed by its positive contribution to regional development.

Since DDD is a new entrant in a rapidly growing and highly competitive market, the Commission found that the relevant thresholds would not be exceeded in this particular case. 

The non-confidential version of the decision will be made available under the case number NN 17/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.