Govt to Expand Semiconductor DLI Scheme to Large, Foreign Companies

Rajeev Chandrasekhar, the minister of state for electronics and IT, announced on Saturday that the government would expand the design-linked incentive (DLI) scheme for semiconductor companies to include larger companies, both foreign and Indian.

We anticipate that this program will now be extended to larger businesses as well. We are willing to consider suggestions that big fabless companies design in India, own or co-own their intellectual property (IP) there, either in collaboration with startups there or independently, and then be eligible for financial support under the DLI scheme, Chandrasekhar said.

$200 million has been set aside by the government to support semiconductor design companies’ innovative efforts.

Seven startups have received funding approval thus far for products ranging from image sensors and vector processes to artificial intelligence (AI). The program is a component of the government’s $10 billion India semiconductor mission, which was announced in 2021.

Startups and Micro, Small, and Medium Enterprises (MSMEs) as outlined by the Department for Promotion of Industry and Internal Trade (DPIIT) are eligible to apply for the incentives, per the current scheme’s rules. The program aims to design integrated circuits, chipsets, system-on-chips (SoCs), and processor cores while also producing domestic intellectual property in the semiconductor industry.

On net sales of the designated designs, the incentive rate is set at 6%.

Despite the fact that we haven’t reached the critical mass in terms of applicants for this program, the minister said, Over 35 startups have applied for the program, and I can definitely sense an increase in momentum and confidence.

At the SemiconIndia 2023 global summit, Chandrasekhar gave a speech intended to promote India as a hub for the semiconductor industry.

The conference featured participation from more than 50 international semiconductor and electronics companies, including Micron Technology, AMD, NXP Semiconductors, and Applied Materials.

Even to those who were pessimistic a year ago, it is increasingly clear that we have come a long way in that short amount of time. Over the past 67 years, we have repeatedly tried and failed to make a breakthrough and establish a presence in this field, he said.

The government made three announcements on the second day of the Semicon event: it identified two startups eligible for incentives in the semiconductor ecosystem; it identified new partnerships to develop a hi-tech skilling curriculum; and it introduced new programs to support startups in this industry.

Through the Arm Flexible Access for Startups Programme, the government’s Centre for Development of Advanced Computing (CDAC) announced a partnership with Arm, the top semiconductor intellectual property company in the world, to support Indian semiconductor startups.

The minister also cited the intergovernmental agreements on semiconductors that India has with the US, the EU, and Japan, claiming that these agreements reflect an alignment of India’s capabilities and global interests.