Govt clears 12 Indian start-ups for incentives under chip design plan

The twelve companies, and the innovations they are working on are: DV2JS Innovation (image sensor system on chip for automotive applications); Vervesemi Microelectronics (microcontroller integrated circuit for industrial applications); Fermionic Design (beamformer IC for satellite communication); Morphing Machines (RISC-V multi-core accelerators for telecom applications); Calligo Technologies (hardware accelerators for AI); Sensesemi Technologies (wearable SoC for healthcare applications); Saankhya Labs (basestation SoC for 5G communication); Aheesa Digital Innovations (networking SoCs for telecom application); Netrasemi (edge-AI SoC for smart vision and IoT applications); Green PMU Semi (energy harvesting power management IC for IoT and sensing applications); WiSig Networks (NarrowBand IoT SoC); and MosChip Technologies (smart energy metre IC).

The DLI scheme is part of the overall $10 billion incentive scheme for the semiconductor ecosystem, which was rolled out by the government in December 2021. The design scheme aims to offer financial incentives and infrastructure support across various stages of development and deployment of semiconductor design for integrated circuits, chipsets, and system on chip over a period of five years.

India is a major force in chip designing, with all major semiconductor companies having their design offices in the country. However, these engineers have traditionally designed systems for foreign companies, which has resulted in zero to little intellectual property creation by Indian entities. The chip DLI scheme is an attempt at plugging that gap, as it incentivises a crucial part of the chip supply chain — the IP.

The run rate of the scheme, however, seems to be slower than the Centre’s initial projections. The government wants to fund at least 100 start-ups over five years under the DLI scheme, which would be an average of 20 entities per year. But, since announcing the scheme in December 2021, it has only approved 12 start-ups so far.

The IT Ministry did not respond to a request for comment.

Earlier this week, India approved its fifth semiconductor unit in the form of an assembly and testing plant being set up by Kaynes Semicon in Gujarat.

India has ambitions to become a major chip hub on the lines of the United States, Taiwan and South Korea, and has been courting foreign companies to set up operations in the country. Previously, the country has approved a fabrication plant worth $11 billion being set up by Tata Electronics in partnership with Taiwan’s Powerchip, and three different chip assembly plants being set up by the Tatas, US-based Micron Technology, and Murugappa Group’s CG Power in partnership with Japan’s Renesas.

Currently, there are more proposals to set up semiconductor units with the government.

This includes a fabrication plant proposed by Israel’s Tower Semiconductor and the Adani Group, and a Rs 4,000 crore assembly plant by Zoho.

After having committed nearly all of the $10 billion in subsidies under its ambitious semiconductor manufacturing incentive policy, the government has prepared a blueprint for the second phase of the scheme — it could increase the outlay of the programme to $15 billion, offer capital support for raw materials and gases used in chip manufacturing, and reduce subsidies for assembly and testing plants, The Indian Express had earlier reported.