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Semicon 2.0: Govt to match VC funding in chip design, pick equity

Press Information Bureau   Mint  

The government plans to co-invest alongside venture capital funds in early-stage semiconductor design firms under its INR 1.27 Trillion Semicon 2.0 programme. The government will match the net private capital raised by eligible companies in a single funding round in return for equity, aiming to bridge funding gaps in the capital-intensive sector. Once a firm becomes revenue-generating, it will have the option to buy back its shares from the government.Under the new framework, the government also plans to support larger conglomerates by providing incentives based on royalties earned from their chip products to encourage private investment in research and development.This initiative follows a previous design-linked incentive scheme where support was limited to INR 15 crore per entity. The government expects to act as an anchor customer for these firms by mandating the use of locally designed components in sectors such as defence, aerospace, and surveillance.