Ministry Of Electronics And IT Invites Domestic Companies To Design Semiconductors

India's Ministry of Electronics and Information Technology (MeitY) is inviting domestic companies to design semiconductor chips, under its Design Linked Incentive (DIL) scheme. The ministry is seeking applications from 100 domestic companies, start-ups or Micro, Small and Medium Enterprises (MSME), to create an ecosystem for semiconductor chip design in India. Under the DLI scheme, the government aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design, for a period of 5 years.

The main objectives of the scheme are - firstly to nurture domestic companies of semiconductor design for Integrated Circuits (Ics), Chipsets, System on Chips (SoCs), System & IP Cores and semiconductor linked design and facilitating their growth. Secondly, the government wants to achieve indigenisation in semiconductor content and IPs involved in the electronic products deployed in the country. And lastly, the government also wants to strengthen the design infrastructure for semiconductor design and facilitate access to start-ups and MSMEs.

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The government wants to achieve indigenisation in semiconductor content and IPs involved in the electronic products deployed in the country

The aim is to nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve a turnover of more than Rs 1500 crore in the next 5 years. "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," the statement reads. A lot of companies are planning to make semiconductors in India and the Tata Group is one among them. In fact, the home-grown company is planning to invest up to $300 million to set up a semiconductor assembly and test unit in India. Reportedly, the factory is expected to start operations by late 2022.

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Under the scheme, which was a part of Rs. 76,000 crore (USD 10 billion) package that the government announced in December 2021, the government will offer up to 50 per cent reimbursement as part of Product Design Linked Incentive (P-DIL). This will be subject to a ceiling of Rs. 15 crore for design activities. Additionally, as part of Deployment Linked Incentives (DIL) companies can get a reimbursement of 4-6 per cent, which is limited to Rs. 30 crore, on sales of approved semiconductor goods. Furthermore, the company will also get chip design infrastructure support, viz. National EDA Tool Grid, IP Core repository, MPW prototyping, and post-silicon-validation activities.

The aim is to nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve a turnover of more than Rs 1500 crore in the next 5 years

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A dedicated portal has been made available for inviting Online applications from January 1, 2022, to December 31, 2024. An applicant must meet the Threshold and Ceiling Limits to be eligible for disbursement of incentives under the Scheme. The approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status (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 3 years after claiming incentives under the scheme.