Semiconductor Supply Chain Current Affairs for UPSC

The Union government has notified the operational framework for Semicon 2.0, the next phase of the India Semiconductor Mission, with a total approved outlay of ₹1,27,500 crore. Unlike a semiconductor policy focused only on building fabrication plants, Semicon 2.0 covers the complete value chain—chip design, indigenous intellectual property, semiconductor equipment and materials, fabrication, advanced packaging, research and talent. The design pillar is especially significant because India possesses a large semiconductor engineering workforce but still lacks comparable Indian-owned chip products and intellectual property.

The United States has said that China will address American concerns over shortages of rare earths and other critical minerals, including yttrium, scandium, neodymium and indium. However, the latest White House statement reportedly dropped an earlier reference to completely removing China’s export control regime, indicating that Beijing’s broader restrictions are likely to continue. The issue is important for UPSC because rare earths and critical minerals are linked to semiconductors, defence systems, electric vehicles, renewable energy, telecom, data centres and strategic supply-chain security. This article explains China’s rare earth export controls, the importance of indium, why the US sees the development as only a small gain, and what it means for India’s critical mineral strategy.