Design Linked Incentive for Semiconductors

• 17 Jan 2022

For Prelims: Design Linked Incentive, Semiconductors, Centre for Development of Advanced Computing

For mains: Semiconductors and their future in India, Components and the importance of the DLI scheme.

Why in News

The Ministry of Electronics and Information (MeitY) is seeking applications from 100 domestic semiconductor chip design firms, companies, start-ups and Micro, Small and Medium Enterprises (MSMEs) under its Design Linked Incentive (DLI) Scheme.

• The DLI scheme is part of the MeitY’s comprehensive Program for the Development of Semiconductors and Display Manufacturing Ecosystems in the country.
• Lately, there has been an abrupt and cascading shortage of semiconductors worldwide.

Semiconductors

• Any of a class of crystalline solids intermediate in electrical conductivity between a conductor and an insulator.
• Semiconductors are employed in the manufacture of various kinds of electronic devices, including diodes, transistors, and integrated circuits. Such devices have found wide application because of their compactness, reliability, power efficiency, and low cost.
• As discrete components, they have found use in power devices, optical sensors, and light emitters, including solid-state lasers.

Key Points

• About:
  • Under the DLI Scheme financial incentives and design infrastructure support will be extended to domestic companies, startups and MSMEs.
  • The incentives will be provided 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.
• Eligibility:
  • The approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status (i.e., more than 50% 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 three years after claiming incentives under the scheme.
  • An applicant must meet the Threshold and Ceiling Limits to be eligible for disbursement of incentives under the Scheme.
    • A dedicated portal has also been made available.
• Aim:
  • To nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve turnover of more than Rs.1500 Crore in the next 5 years.
• Approach:
  • 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.
• Nodal Agency:
  • 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.
• Components of DLI: The scheme has three components – Chip Design infrastructure support, Product Design Linked Incentive and Deployment Linked Incentive:
  • Chip Design Infrastructure Support: Under this, C-DAC will set up 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.
  • Product Design Linked Incentive: Under this, a reimbursement of up to 50% 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.
  • Deployment Linked Incentive: Under this, an incentive of 6% to 4% 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.
• Related Initiatives:
  • For Semiconductor Fabs and Display Fabs:
    • Government would provide fiscal support of up to 50% of the project cost for setting up semiconductor and display fabrication units.
  • Semi-conductor Laboratory (SCL):
    • MeitY will take requisite steps for modernization and commercialization of Semi-conductor Laboratory (SCL).
  • For Compound Semiconductors:
    • Government will support fiscal support of 30% of capital expenditure to approved Compound Semiconductors units.
  • India Semiconductor Mission:
    • In order to drive the long-term strategies for developing a sustainable semiconductors and display ecosystem, a specialised and independent India Semiconductor Mission (ISM) will be set up.
  • Production Linked Incentives:
    • Incentive support to the tune of Rs.55,392 crore (7.5 billion USD) have been approved under Product Linked Incentive (PLI ) for Largest Scale Electronics Manufacturing, PLI for IT Hardware, SPECS Scheme and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.

Centre for Development of Advanced Computing

• C-DAC is the premier Research & Development organisation of the Ministry of Electronics and Information Technology (MeitY) for carrying out R&D in IT, Electronics and associated areas.
• India's first supercomputer PARAM 8000 was indigenously built (in 1991)by the Centre for Development of Advanced Computing.

Source: PIB