The semiconductor design promotion scheme will be complemented with the establishment of Centres of Excellence under TIDCO, through public-private partnerships.
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FLORENCE LO
As semiconductor manufacturing projects elude the state, Tamil Nadu has sharpened its focus on the design ecosystem and has sanctioned the Semiconductor Design Promotion Scheme to offer targeted subsidies and prototyping grants to fabless design firms.
This scheme forms part of the state’s ₹500-crore Tamil Nadu Semiconductor Mission 2030 (TNSM 2030) announced during the TN Budget 2025, a release from the state industries minister said on Monday.
As per the GO, in case of eligible TN-based chip design firms whose product is already deployed, the scheme offers a payroll subsidy of 30 per cent, 25 per cent, 20 per cent in years 1, 2 and 3 respectively. The payroll subsidy shall be capped at ₹20,000 per employee per month.
In case of firms whose product is yet to be commercially deployed, a payroll-based subsidy covering 50 per cent of the payroll cost for three years, subject to a ceiling of ₹5 crore per firm, shall be provided. For such firms, the scheme also extends a subsidy of 50 per cent, not exceeding ₹20 crore, of the cost incurred towards sourcing of design software, intellectual property rights, prototyping, testing, validation, certification and other costs as approved by an Expert Committee
”The Government, on best effort basis, will negotiate with national and international semiconductor fabs to obtain concessional rates for fabricating the chips designed by the local firms,” the GO adds.
Speaking to businessline, a state official added that while semiconductor design is not capital heavy, it involves longer gestation period and the idea is to get our homegrown chip design and R&D talent to start their own firms to help create and retain the IP in India.
The design promotion scheme will be complemented with the establishment of Centres of Excellence under TIDCO, through public-private partnerships. Tamil Nadu will also roll out a workforce development programme to train 1,000 engineering students through platforms such as the India Semiconductor Workforce Development Programme (ISWDP), while sponsoring select candidates to premier institutions in India and abroad.
Speaking on the announcement, state industries minister TRB Rajaa said, “With targeted subsidies and prototyping grants, we are giving fabless design firms the critical early-stage support they need to succeed. The Centres of Excellence will anchor cutting-edge research, foster collaboration between industry and academia and nurture the next generation of chip designers.”
V Arun Roy, Industries Secretary, said, “By combining subsidies for design firms, co-investments in infrastructure and parks, enabling a pilot fabrication facility and an integrated skilling programme, we are creating a self-sustaining semiconductor value chain that will draw investment, create jobs and foster innovation across Tamil Nadu.”
TNSM 2030 will focus on four strategic priorities- First, to promote fabless companies engaged in chip design, testing and packaging. Second, it will support the development of semiconductor machinery manufacturing. Third, the mission will invest in research and innovation, and, finally, it will focus on creating a skilled workforce aligned with global and domestic industry needs, ensuring a talent pipeline that powers long-term growth.
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Published on August 18, 2025
