Govt to expand Semiconductor DLI scheme to larger, foreign firms: MoS IT

The government will expand the design-linked incentive (DLI) scheme for semiconductor companies to include larger companies – both foreign and Indian, as suggested by the industry stakeholders, Rajeev Chandrasekhar, minister of state for electronics and IT informed on Saturday.  

“We are envisaging that this programme will now expand to include larger companies as well. We are willing to look at suggestions that are being made where big fabless companies will design in India and have the intellectual property (IP) owned or co-owned in India either in partnership with startups in India or on their own, and be qualified for financial support under the DLI scheme,” Chandrasekhar said.

The government has set aside $200 million to help semiconductor design firms in innovation.

So far, seven startups with product applications ranging from artificial intelligence (AI) to vector processes and image sensors have been approved for funding. The scheme is part of the $10 billion India semiconductor mission announced by the government in 2021.

According to the current scheme guidelines, startups and Micro, Small and Medium Enterprises (MSMEs) as defined by the Department for Promotion of Industry and Internal Trade (DPIIT) are eligible to apply for the incentives. The programme is intended to create domestic intellectual property in the semiconductor space as well as design integrated circuits, chipsets, system on chips (SoCs) and processor cores.

The rate of incentive stands at six per cent on net sales of specified designs.  

“Though we haven’t reached the critical mass in terms of the number of people who apply under this programme but certainly I can see an increase in momentum and confidence among over 35 startups that have applied for the scheme,” the minister said.

Chandrasekhar was speaking at the SemiconIndia 2023 global summit aimed at showcasing India as a destination of the semiconductor ecosystem.

Over 50 global semiconductor and electronics companies including Micron Technology, AMD, NXP Semiconductors, and Applied Materials participated in the conference.

“It is increasingly becoming obvious, even to those who were cynical about a year ago, that in just over a year we have travelled a significant distance. We have tried and failed repeatedly over the last six-seven decades to make a breakthrough and create a presence in this space,” he said.

On the second day of the Semicon event, the government made three announcements on new partnerships to develop a hi-tech skilling curriculum, identifying two startups eligible for incentives in the semiconductor ecosystem, and introduction of programmes to boost startups within this space.

The government’s Centre for Development of Advanced Computing (CDAC) announced a partnership with Arm, the world’s leading semiconductor IP company, to empower semiconductor startups in India through the Arm Flexible Access for Startups Program.

The minister also listed out the inter-governmental agreements on semiconductors between India and the US, the European Union, and Japan saying that there was an alignment of global interests and India’s ability.