Centre invites applications from domestic firms for semiconductor chip design

Ministry of Electronics and Information Technology (Meity) has invited applications from domestic companies, start-ups and MSMES under its Design Linked Incentive (DLI) Scheme to create a vibrant eco-system for semiconductor chip design in India.

Under the DLI scheme, which was announced in December 2021, financial incentives and design infrastructure support will be extended to domestic companies, startups and MSMES across various stages of development and deployment of semiconductor design for Integrated Circuits (ICS), chipsets, system on chips (Socs), systems & IP cores and semiconductor linked design for over a period of 5 years. The scheme, which was a part of Rs 76,000 crore ($10 billion) package, aims to nurture at least 20 domestic companies involved in semiconductor design and facilitating them to achieve turnover of more than Rs 1,500 Crore in the next 5 years, the Ministry of Electronics & IT said in a statement.

The scheme has three components: chip design infrastructure support, product design-linked incentive, and deployment linked incentive. The C-DAC will setup the India Chip Centre under the chip design infrastructure support to host the state-of-the-art design infrastructure and facilitate its access to supported companies. Under the design-linked incentive component, a reimbursement of up to 50 percent 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 component, an incentive of 6 percent to 4 percent of net sales turnover over 5 years subject to a ceiling of Rs 30 crore per application will be provided to approved applicants whose semiconductor design for Integrated Circuits (ICS), Chipsets, System on Chips (Socs), Systems & IP Cores and semiconductor linked design are deployed in electronic products.

The approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status for a period of three years after claiming incentives under the scheme.