Govt clears 12 Indian startups for incentives under chip design plan

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Last Updated10/09/2024

The government has received 59 applications under the design linked incentive (DLI) scheme, of which it has cleared 12 for financial assistance. 21 applications are under review.

The Ministry of Electronics and IT (MeitY) has taken significant steps toward bolstering India’s semiconductor ecosystem by approving chip design proposals from 12 Indian startups.
These projects, which span sectors from telecommunications to AI hardware accelerators, will receive over ₹130 crore in government funding under the Design Linked Incentive (DLI) scheme. The total cost of these projects is projected to be ₹342 crore.
The DLI scheme, part of the broader $10 billion incentive initiative rolled out in December 2021, aims to promote semiconductor innovation in India by providing financial support to chip design startups.
This is crucial as India seeks to build domestic intellectual property (IP) in the chip industry, an area historically dominated by foreign companies. Indian engineers, while renowned globally for their design expertise, have largely contributed to IP owned by non-Indian entities.
The DLI scheme is designed to change this dynamic, encouraging local startups to create their own IP and contribute to the global chip supply chain.

DV2JS Innovation - Image sensor systems on chip for automotive applications.
Vervesemi Microelectronics - Microcontroller integrated circuits for industrial uses.
Fermionic Design - Beamformer IC for satellite communication.
Morphing Machines - RISC-V multi-core accelerators for telecom applications.
Calligo Technologies - Hardware accelerators for AI applications.
Sensesemi Technologies - Wearable SoCs for healthcare applications.
Saankhya Labs - Basestation SoC for 5G communication.
Aheesa Digital Innovations - Networking SoCs for telecom applications.
Netrasemi - Edge-AI SoCs for smart vision and IoT applications.
Green PMU Semi - Energy harvesting power management IC for IoT applications.
WiSig Networks - NarrowBand IoT SoC.
MosChip Technologies - Smart energy meter IC.

While the scheme has approved 12 startups and committed ₹133 crore in funding so far, the disbursal of funds has been slow, with only ₹7 crore released to date.
The government had aimed to fund 20 startups annually under the DLI scheme, but since its launch in December 2021, the target is yet to be met. Nevertheless, MeitY has reviewed 59 applications, with 21 under active consideration.
India’s chip ambitions extend beyond design to manufacturing, as evidenced by the approval of Tata Electronics' $11 billion fabrication plant, set up in collaboration with Taiwan’s Powerchip.
Additionally, several semiconductor assembly and testing plants are being developed by entities such as Micron Technology, Murugappa Group, and Renesas in partnership with Tata.

India is positioning itself to become a significant player in the semiconductor industry, on par with global leaders such as the U.S., Taiwan, and South Korea.
The government’s blueprint for a second phase of the semiconductor scheme, increasing the outlay from $10 billion to $15 billion, signals a strong commitment to achieving this goal.
The revised strategy could focus on capital support for raw materials and chip manufacturing infrastructure, reducing subsidies for assembly and testing units, and encouraging foreign companies to establish operations in India.
As global demand for semiconductors continues to surge, India’s initiatives to build a robust semiconductor supply chain, from design to fabrication, are critical for reducing dependence on imports and enhancing its role in the global technology landscape.