India Approves 23 Chip-Design Projects Under DLI Scheme, Boosting Semiconductor Ecosystem

The Government of India has sanctioned 23 semiconductor chip-design projects under the Design Linked Incentive (DLI) Scheme, marking another major step in strengthening the nation’s semiconductor ecosystem. The initiative is part of the larger Semicon India Programme, designed to reduce dependency on imports and create a robust environment for indigenous innovation in chip design.

These projects, led primarily by startups, MSMEs, and academic institutions, aim to build chips and System-on-Chip (SoC) solutions for a wide range of applications, including surveillance systems, smart meters, microprocessor IPs, networking, and other critical technologies.

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Access to Infrastructure and Tools

A central element of the DLI scheme is its support for design infrastructure. So far, 72 companies have been granted access to world-class Electronic Design Automation (EDA) tools, which are indispensable for chip designers working on advanced architectures. Alongside these firms, more than 278 academic institutions have also been equipped with EDA tools and intellectual property (IP) cores, ensuring that students and researchers contribute meaningfully to India’s semiconductor journey.

The government has emphasized that democratizing access to such advanced tools will empower domestic innovators to compete with global players. By making these resources available to both startups and academic institutions, India is building the foundation for long-term leadership in chip design.

Financial Backing and Investment Flow

The DLI Scheme provides robust financial incentives to encourage both early-stage innovation and large-scale commercialization. Projects sanctioned under this initiative are eligible for up to 50 percent support in prototyping and design costs, while companies can also benefit from sales-linked incentives for five years once their chips reach the market.

So far, the government has approved projects worth nearly ₹803 crore, with funds being disbursed in a phased manner linked to project milestones. This financial support has already begun attracting venture capital investments, with several startups securing funding to accelerate the commercial rollout of their designs. Importantly, some of the sanctioned companies have already achieved prototype tape-outs at global semiconductor foundries, a crucial step toward market readiness.

Spotlight on Vervesemi Microelectronics

Among the beneficiaries is Vervesemi Microelectronics, a Bengaluru-based fabless semiconductor company established in 2017. Known for its machine-learning-powered analog IPs and a wide range of chip designs catering to sectors such as space, defense, smart energy, and industrial automation, Vervesemi stands out as one of the pioneers of India’s fabless movement.

Under the DLI Scheme and the Chips to Startup (C2S) programme, the company is working on several breakthrough products. These include a BLDC controller chip for small appliances, precision motor-control ASICs for electric vehicles and drones, and a multifunction data acquisition ASIC for aerospace applications. Another notable design—a sensor ASIC for weighing systems and force-touch devices—is expected to enter sampling by the end of 2025. With more than 110 IPs, 25 integrated circuit products, and multiple patents, Vervesemi reflects the scale of innovation emerging from Indian startups.

Broader Semiconductor Developments

The design incentives come at a time when India is also investing heavily in semiconductor manufacturing. The India Semiconductor Mission (ISM) has recently approved four chip fabrication projects worth ₹1.6 trillion, spread across six states. These are expected to create thousands of jobs and complement the design ecosystem by providing fabrication facilities closer to home.

States are also stepping in to encourage local talent. The Tamil Nadu government, for example, has launched a Semiconductor Mission 2030, promising subsidies, grants, and shared infrastructure for fabless chip designers. Meanwhile, Union Minister Ashwini Vaishnaw has reiterated the government’s vision of transforming India into a “product nation,” where domestic firms not only design chips but also manufacture and export them globally.

Challenges Ahead

While the recent approvals mark a strong beginning, challenges remain in scaling India’s semiconductor ambitions. Reports suggest that nearly 97 percent of the ₹65,000 crore allocation for semiconductor manufacturing incentives has already been committed, leaving limited space for new entrants in fabrication projects. Experts argue that while design initiatives are thriving, India must ensure sustained funding and long-term planning to avoid resource bottlenecks.

Conclusion

The approval of 23 chip-design projects under the DLI Scheme represents a turning point for India’s semiconductor story. By empowering startups, MSMEs, and academia with infrastructure, financial support, and a clear commercialization pathway, the government is laying the foundation for a strong domestic chip-design ecosystem.

Coupled with parallel investments in semiconductor manufacturing, these initiatives bring India closer to its goal of becoming a global hub for semiconductor innovation and self-reliance. While challenges of funding and scaling persist, the momentum generated by these projects signals a new era for India’s digital and technological sovereignty.

(Sources: OpIndia, PIB, NewsOnAir)