MeitY seeks applications for DLI scheme for semiconductor chip design

A month after the government announced Rs 76,000-crore scheme for developing semiconductor ecosystem in India, the Ministry of Electronics and Information Technology (MeitY) is now seeking applications from 100 domestic companies, start-ups and MSMEs under its Design Linked Incentive (DLI) scheme. 

Under the DLI Scheme, financial incentives and design infrastructure support will be extended to domestic companies, start-ups and MSMEs across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), chipsets, System on Chips (SoCs), systems and IP cores and semiconductor linked design for over a period of five years. 

The ministry has created a dedicated portal -- www.chips-dli.gov.in -- for inviting online applications from January 1, 2022 to December 31, 2024.

The scheme will have three components -- chip design infrastructure support, product design linked incentive, and deployment linked incentive. The Centre for Development of Advanced Computing (C-DAC), a scientific society operating under MeitY, will serve as the nodal agency for implementation of the DLI scheme.

Under the chip design infrastructure support, C-DAC will set up 'India Chip Centre' to host the state-of-the-art design infrastructure (viz. EDA Tools, IP Cores and support for MPW (Multi Project Wafer fabrication) and post-silicon validation) and facilitate its access to supported companies. Under the product design linked incentive component, a reimbursement of up to 50 per cent of the eligible expenditure, subject to a ceiling of Rs 15 crore per application, will be provided as fiscal support to the approved applicants who are engaged in semiconductor design.

Under the deployment linked incentive component, an incentive of 6 per cent to 4 per cent of net sales turnover over five years, subject to a ceiling of Rs 30 crore per application, will be provided to approved applicants whose semiconductor design for ICs, chipsets, SoCs, systems and IP cores, and semiconductor linked design are deployed in electronic products.

Also Read: The complex ecosystem of chip manufacturing

A press release issued by the ministry said that the approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status (i.e., more than 50 per cent of the capital in it is beneficially owned by resident Indian citizens and/ or Indian companies, which are ultimately owned and controlled by resident Indian citizens) for a period of three years after claiming incentives under the scheme.

An applicant must meet the threshold and ceiling limits to be eligible for disbursement of incentives under the scheme.

The DLI scheme will also take a graded and pre-emptive approach to identify the products of national priorities and implement strategies for their complete or near complete indigenisation and deployment, thereby taking steps towards import substitution and value addition in strategic and societal sectors.

The DLI scheme is a part of the Rs 76,000-crore ($10 billion) package through which the government aims to bring up at least 20 domestic companies involved in semiconductor design and facilitate them to achieve turnover of more than Rs 1,500 crore in the next five years.

Also Read: India, Taiwan eyeing FTA, look at setting up semiconductor manufacturing hub