20 chips, one breakthrough: India’s semiconductor push gets a boost as DLI scheme bears fruit

A total of 20 chip designs from 17 academic institutions have been successfully fabricated by the Semiconductor Laboratory (SCL) in Mohali, a first-of-its-kind achievement under the government’s Design Linked Incentive (DLI) scheme. This was announced in the Parliament on Wednesday by Union Electronics and IT Minister Jitin Prasada.

The scheme, launched in December 2021 with a Rs 1,000-crore budget under the broader Rs 76,000 crore, Semicon India Programme, is specifically aimed at nurturing domestic startups, MSMEs and academic institutions in semiconductor design, a segment traditionally hindered by steep entry barriers, prohibitive costs and long gestation periods.

“The DLI scheme is beginning to deliver on its promise. With 23 companies already sanctioned for chip-design support, we are now seeing real, market-ready outcomes,” said Minister Prasada in the Lok Sabha, highlighting the growing momentum of India’s design-led semiconductor aspirations.

So far, 72 startups and 278 academic institutions have gained access to state-of-the-art Electronic Design Automation (EDA) tools and IP cores, essential for developing cutting-edge semiconductor designs. The government’s push is beginning to bridge a long-standing gap between research and real-world deployment, with design labs in Indian campuses now turning out viable silicon.

Among the 23 chip-design projects sanctioned, several target critical applications, including surveillance systems, energy metering, networking technologies and microprocessor IP development. Six companies have already completed their prototype tape-outs at various semiconductor foundries and ten have secured venture capital to scale up production — a clear signal of growing investor confidence in India’s domestic design ecosystem.

Under the DLI Scheme, eligible companies can receive up to 50% of design and prototyping costs (capped at Rs 15 crore per application), along with incentives linked to sales revenue during commercialisation. The total sanctioned outlay for ongoing projects, including the cost of EDA tools, now stands at Rs 803.08 crore.

With academic institutions now successfully fabricating chip designs through SCL, the DLI scheme has brought Indian universities and technical institutes into the mainstream of global semiconductor development. These institutions, once confined to theoretical chip design are now producing hardware that could power next-generation devices, according to officials.

Officials say the scheme is being implemented in close coordination with stakeholders and will evolve with industry feedback. Funding is linked to clearly defined development milestones to ensure accountability and measurable outcomes.