Design Linked Incentive (DLI) Scheme: Boosting Fabless Ecosystem

Syllabus: Indigenization of Technology

Ministry of Electronics and IT

Why in news?

MeitY released key achievements of DLI Scheme: 24 chip design projects sanctioned, 16 tape-outs completed, and 50% value addition in chips attributed to design.

⚛️Static Concepts

Semiconductor Supply ChainPLI SchemesDigital India↗

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Prelims-Oriented Points

Objective: Nurture 'fabless' companies (design only, no manufacturing) in semiconductor ecosystem.
Nodal Agency: C-DAC (Centre for Development of Advanced Computing).
Incentives: Product Design Linked (up to 50% reimbursement, cap ₹15 cr); Deployment Linked (6% to 4% of net sales, cap ₹30 cr).
Infrastructure: 'ChipIN Centre' provides centralized access to EDA (Electronic Design Automation) tools to 100+ startups.
Eligibility: Startups, MSMEs, and Domestic companies (owned by resident Indians).

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Examiner's Trap: DLI is for DESIGN companies (Fabless), not for setting up semiconductor FABS (Manufacturing plants which are covered under a different scheme).

Quick Data Points

50% of semiconductor value comes from design

24 projects sanctioned

Reimbursement up to 50% of expense

Mains Value Addition

GS-3: Science and Technology; Indigenization; Manufacturing.

Strategic Autonomy: Reducing dependence on imported IP cores and chips prevents supply chain vulnerabilities.
Value Capture: Fabless design captures ~50% of value chain with lower capital expenditure compared to foundries.
Talent Utilization: Leverages India's strong pool of 1,000+ specialized chip engineers trained under projects like C2S (Chips to Startup).

Source

Press Information Bureau (PIB)

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