Why is it in the News?

The semiconductor Design-Linked Incentive (DLI) scheme, set to undergo a mid-term appraisal, has so far approved only seven start-ups, falling significantly short of its intended goal of supporting 100 over a span of five years since its announcement.

About Design-Linked Incentive (DLI) Scheme:

• Under the DLI scheme, government will provide financial incentives and design infrastructure to domestic companies, start-ups and MSMEs focussed on semiconductor design.
• The DLI scheme has been announced by the Ministry of Electronics and Information Technology (MeitY) to offset the disabilities in the domestic industry involved in semiconductor design in order to not only move up in value-chain but also strengthen the semiconductor chip design ecosystem in the country.
• C-DAC (Centre for Development of Advanced Computing), a scientific society operating under MeitY, will serve as the nodal agency for implementation of the DLI scheme.

Objectives:

• • Nurturing and facilitating the growth of the domestic companies, startups and MSMEs.
  • Achieving significant indigenization in semiconductor content and IPs involved in the electronic products deployed in the country, thereby facilitating import substitution and value addition in the electronics sector.
  • Strengthening and facilitating access to semiconductor design infrastructure for startups and MSMEs.

Duration: The scheme shall initially be for three (3) years from 01-01-2022.

• The scheme has three components – Chip Design infrastructure support, Product Design Linked Incentive and Deployment Linked Incentive.
  • Under the Chip Design infrastructure support, C-DAC will set the 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) & post-silicon validation) and facilitate its access to supported companies.
  • Under the Product Design Linked Incentive component, reimbursement of up to 50% of the eligible expenditure subject to a ceiling of ?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% to 4% of net sales turnover over 5 years subject to a ceiling of ?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 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 & deployment thereby taking steps towards the import substitution & value addition in strategic & societal sectors.