Question 1

The DLI scheme covers the physical manufacturing and mass fabrication of semiconductor chips.

Accepted Answer

DLI financially supports the software design, IP creation, and prototyping of chips (the 'fabless' ecosystem). Mass physical fabrication is covered under the PLI scheme.

Question 2

The India Semiconductor Mission (ISM) directly handles the disbursement of funds and EDA tools for chip designers.

Accepted Answer

While ISM oversees the broader semiconductor strategy, the Centre for Development of Advanced Computing (C-DAC) is the designated nodal agency implementing the DLI scheme and running the ChipIN centre.

Question 3

Consider the following statements regarding the Design Linked Incentive (DLI) Scheme under the Semicon India Programme:
1. The Product Design Linked Incentive reimburses up to 50 percent of eligible expenditure subject to a ceiling of Rs 15 crore per application.
2. The Centre for Development of Advanced Computing (C-DAC) serves as the nodal agency for implementing the DLI scheme.
3. Foreign-owned tech giants can avail DLI benefits provided they set up a physical office in India and hire Indian engineers.

Accepted Answer

(b) Only two — Statement 1 is correct: P-DLI reimburses up to 50 percent of eligible expenditure capped at Rs 15 crore. Statement 2 is correct: C-DAC is the nodal agency running the DLI scheme and the ChipIN centre. Statement 3 is incorrect: The DLI scheme strictly requires the applicant to retain a 'domestic status', meaning more than 50 percent of the capital must be beneficially owned by resident Indian citizens for at least three years after claiming incentives.

Question 4

Match List I (Component/Entity of Semicon India) with List II (Specific Feature/Role):
List I:
A. Product Design Linked Incentive
B. Deployment Linked Incentive
C. ChipIN Centre
D. Semicon India Programme

List II:
1. Total budget outlay of Rs 76,000 Crore
2. Centralized facility providing EDA tools and IP libraries
3. Reimburses 4 to 6 percent of net sales turnover over five years
4. Reimburses 50 percent of eligible design expenditure

Accepted Answer

(a) A-4, B-3, C-2, D-1 — A matches 4: Product DLI provides 50 percent reimbursement of design costs. B matches 3: Deployment DLI provides 4-6 percent on net sales. C matches 2: ChipIN Centre, run by C-DAC, provides the national EDA tool grid. D matches 1: The overarching Semicon India Programme was launched with an outlay of Rs 76,000 Crore.

Question 5

Assertion (A): Fabless semiconductor companies occupy a highly strategic position in the global chip value chain despite not owning physical manufacturing foundries.
Reason (R): Semiconductor design and intellectual property (IP) creation account for up to 50 percent of a chip's total value addition.

Accepted Answer

(a) Both A and R are true and R is the correct explanation of A — Both statements are factually correct. Fabless companies (like NVIDIA, AMD, or Indian startups under DLI) are strategically powerful because the actual design blueprint and proprietary IP dictate the chip's functionality and yield the highest profit margins, constituting up to 50 percent of the value, which perfectly explains why they don't necessarily need to own physical foundries to be dominant.

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