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DLI-Backed Semiconductor Startups Raise Over $100 Million and Complete 35 Tape-Outs

India’s domestic semiconductor design sector is moving from early prototypes toward investible commercial products, with companies supported under the Design Linked Incentive (DLI) scheme cumulatively securing over $100 million in venture funding and completing 35 chip-design tape-outs.

What Happened

The government’s DLI scheme has aided emerging fabless chip companies in reaching key technical and financial milestones. Among the latest developments, Chennai-based fabless startup Aheesa Digital Innovations achieved first-pass silicon success on Independence Day for its ‘VIHAAN’ networking System-on-Chip (SoC). The chip, which was taped out on Republic Day earlier this year, is designed for fibre broadband networking and is moving toward a targeted production tape-out in 2027. Earlier this year, Aheesa raised roughly Rs 40 crore from TNIFMC through the Tamil Nadu Emerging Sector Seed Fund alongside private investors.

Multiple other DLI-supported companies have also logged operational milestones across diverse applications:

  • Vervesemi Microelectronics: Achieved first-pass silicon success for a BLDC motor-controller chip utilizing an indigenous processor from Incore Semiconductor.
  • Netrasemi: Tested a 12nm Vision SoC featuring integrated video-analytics acceleration.
  • OptoML: Received a 12nm compute-in-memory SoC designed for faster and more power-efficient artificial intelligence processing.
  • Mindgrove Technologies: Partnered with PRAMA India to explore integrating its Vision SoC into CCTV cameras.
  • IndieSemiC: Secured global certification for its Bluetooth Low Energy 6 chip module.

Key Highlights

  • Capital and Technical Milestones: Over $100 million in venture capital raised and 35 chip-design tape-outs recorded by DLI-supported startups.
  • Broad Sector Application: Startups under the programme are developing chips for drones, satellite communications, defence systems, automotive uses, telecom equipment, AI, IoT devices, smart meters, and surveillance cameras.
  • Infrastructure Support: Advanced design tools have been distributed to 455 entities, comprising 105 startups and 350 academic institutions.
  • Academic Pipeline: Under the Chips to Startup programme, 71 academic institutions have completed 245 chip-design tape-outs to expand national engineering talent.
  • Semicon 2.0 Backing: The overall ecosystem is supported by the government’s Semicon 2.0 programme, approved in July with an outlay of Rs 1.27 lakh crore.

Why This Matters

Chip design represents one of the highest-value segments within the global semiconductor supply chain. According to industry metrics, design contributes up to half of the total value addition and represents approximately 15% to 35% of the bill-of-materials cost in electronic devices. A tape-out signifies the completion of a chip design and its dispatch for fabrication, while first-pass silicon success indicates that the manufactured chip functioned properly on its initial run—a critical technical requirement before heading toward commercial production.

What to Watch Next

Under the broader Semicon 2.0 framework, the government aims to enhance domestic capabilities across design, fabrication, packaging, materials, equipment, research and development, and skilled personnel. The primary forthcoming challenge will be transitioning India-designed chips from validated silicon into large-scale volume manufacturing and securing global supply contracts. Aheesa’s production tape-out for its networking chip is slated for 2027, while commercial integrations, such as Mindgrove’s CCTV initiative with PRAMA India, continue development.

Frequently Asked Questions

What is the DLI scheme?

The Design Linked Incentive (DLI) scheme is a government initiative that supports domestic startups in designing semiconductor chips for diverse sectors, including artificial intelligence, telecom, automotive, defence, and IoT.

What is the difference between a tape-out and first-pass silicon success?

A tape-out occurs when a finalised chip blueprint is sent to a foundry for fabrication. First-pass silicon success occurs when the initial physical chip manufactured from that design functions as intended without needing redesign cycles.

What is the budget for Semicon 2.0?

Semicon 2.0 was approved by the government in July with a total outlay of Rs 1.27 lakh crore to build end-to-end semiconductor capabilities.

Source: The Times of India