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2 Feb 2026·Source: The Indian Express
3 min
EconomyScience & TechnologyNEWS

Semiconductor Mission 2.0: Focus on Supply Chains and Equipment

Government allocates ₹1,000 Cr for India Semiconductor Mission's phase two.

Semiconductor Mission 2.0: Focus on Supply Chains and Equipment

Photo by Bill Fairs

The government has allocated ₹1,000 crore for FY27 for the phase two of India Semiconductor Mission. The focus has shifted to developing supply chains, intellectual property, and equipment manufacturing within the semiconductor industry. Earlier, the focus was on attracting investments for setting up fabrication plants.

The government aims to create a comprehensive ecosystem for semiconductor manufacturing. This includes support for research and development to enable cutting-edge skills and research.

Key Facts

1.

Allocation: ₹1,000 crore for FY27

2.

Mission: India Semiconductor Mission phase two

UPSC Exam Angles

1.

GS Paper III (Economy): Government policies and interventions for development in various sectors.

2.

Connects to the syllabus through industrial policy, technology development, and supply chain management.

3.

Potential question types: Statement-based MCQs, analytical mains questions on the role of government in promoting semiconductor manufacturing.

Visual Insights

India Semiconductor Mission 2.0: Key Allocation

Highlights the financial allocation for the second phase of the India Semiconductor Mission, emphasizing the government's commitment to developing a comprehensive semiconductor ecosystem.

FY27 Allocation for Semiconductor Mission 2.0
₹1,000 crore

This allocation signifies the government's continued support for the semiconductor industry, shifting focus to supply chains and equipment manufacturing. Important for understanding government priorities in the electronics sector.

More Information

Background

The semiconductor industry's origins can be traced back to the mid-20th century with the invention of the transistor at Bell Labs in 1947. This invention revolutionized electronics, replacing bulky vacuum tubes with smaller, more efficient semiconductor devices. Early applications focused on military and aerospace technologies, driving initial research and development. The integrated circuit (IC), or microchip, invented in the late 1950s, further miniaturized electronic circuits, paving the way for the modern electronics era. The evolution of the semiconductor industry has been marked by increasing complexity and globalization. The Moore's Law, which predicted the doubling of transistors on a microchip every two years, has driven relentless innovation in chip design and manufacturing. This has led to the development of specialized equipment and processes, creating a complex global supply chain. Countries like the United States, Japan, and South Korea emerged as early leaders in semiconductor manufacturing, investing heavily in research and infrastructure. Government policies have played a crucial role in shaping the semiconductor industry. In the United States, initiatives like the Semiconductor Manufacturing Technology (Sematech) consortium in the 1980s aimed to bolster domestic manufacturing capabilities. Similarly, countries in Asia have used industrial policies, subsidies, and tax incentives to attract semiconductor investments. These policies have often focused on promoting research and development, building infrastructure, and fostering collaboration between industry, academia, and government.

Latest Developments

Recent years have seen increased geopolitical interest in semiconductor manufacturing, driven by supply chain vulnerabilities exposed during the COVID-19 pandemic. The CHIPS and Science Act in the United States, enacted in 2022, provides substantial funding for domestic semiconductor manufacturing and research. This initiative aims to reduce reliance on foreign suppliers and strengthen national security. Similar efforts are underway in Europe and other regions to build more resilient semiconductor ecosystems. The focus on semiconductor supply chains has also led to greater scrutiny of export controls and technology transfer. Countries are implementing stricter regulations to prevent the transfer of sensitive technologies to potential adversaries. This has created tensions in international trade and raised concerns about the fragmentation of the global semiconductor market. The World Trade Organization (WTO) plays a role in mediating trade disputes and ensuring fair competition in the semiconductor industry. Looking ahead, the semiconductor industry is expected to continue to grow, driven by demand for advanced chips in areas like artificial intelligence, 5G, and electric vehicles. The development of new materials and manufacturing processes will be crucial to sustaining this growth. Governments are likely to play an increasingly active role in shaping the industry, providing support for research, infrastructure, and workforce development. The India Semiconductor Mission 2.0 aligns with this global trend, focusing on building a comprehensive semiconductor ecosystem.

Frequently Asked Questions

1. What is the India Semiconductor Mission 2.0 primarily focused on, and how does it differ from the initial phase?

The India Semiconductor Mission 2.0 focuses on developing supply chains, intellectual property, and equipment manufacturing within the semiconductor industry. The initial phase was primarily focused on attracting investments for setting up fabrication plants.

2. What is the allocated budget for the India Semiconductor Mission phase two for FY27?

The government has allocated ₹1,000 crore for FY27 for the phase two of the India Semiconductor Mission.

Exam Tip

Remember the allocated amount (₹1,000 crore) for Prelims.

3. Why is the development of a semiconductor ecosystem important for India?

Developing a comprehensive semiconductor ecosystem is crucial for reducing reliance on foreign suppliers, strengthening national security, and fostering economic growth through technological advancement.

4. What are the key areas of focus for the India Semiconductor Mission 2.0, besides attracting investments?

Besides attracting investments, the key areas of focus are developing supply chains, fostering intellectual property creation, and promoting equipment manufacturing within the semiconductor industry.

5. How might the India Semiconductor Mission 2.0 impact the average Indian citizen?

A successful semiconductor mission can lead to cheaper electronics, more job opportunities in the tech sector, and increased availability of technologically advanced products and services for the average Indian citizen.

6. What recent global developments have influenced the shift in focus towards semiconductor supply chains?

The COVID-19 pandemic exposed vulnerabilities in global supply chains, leading to increased geopolitical interest in semiconductor manufacturing. The CHIPS and Science Act in the United States, enacted in 2022, is a key example.

7. What is the historical background of the semiconductor industry?

The semiconductor industry's origins can be traced back to the mid-20th century with the invention of the transistor at Bell Labs in 1947. This invention revolutionized electronics, replacing bulky vacuum tubes with smaller, more efficient semiconductor devices.

8. What kind of research and development is the government aiming to support through the India Semiconductor Mission 2.0?

The government aims to support research and development to enable cutting-edge skills and research in the semiconductor field, fostering a comprehensive ecosystem for semiconductor manufacturing.

9. What are the potential challenges in achieving the goals of the India Semiconductor Mission 2.0?

Potential challenges include securing consistent funding, attracting skilled labor, competing with established global players, and navigating technological advancements in the semiconductor industry.

10. What is 'intellectual property' in the context of the India Semiconductor Mission 2.0?

In the context of the India Semiconductor Mission 2.0, intellectual property refers to the designs, patents, and innovative technologies developed within the semiconductor industry. The mission aims to foster the creation and protection of such intellectual property within India.

Practice Questions (MCQs)

1. Consider the following statements regarding the India Semiconductor Mission 2.0: 1. It focuses primarily on attracting investments for setting up semiconductor fabrication plants. 2. It aims to develop a comprehensive ecosystem for semiconductor manufacturing, including supply chains and equipment manufacturing. 3. The government has allocated ₹1,000 crore for the mission in FY27. Which of the statements given above is/are correct?

  • A.1 only
  • B.2 and 3 only
  • C.3 only
  • D.1, 2 and 3
Show Answer

Answer: B

Statement 1 is INCORRECT: While attracting investments for fabrication plants was the initial focus, the mission has shifted to a broader ecosystem approach. Statement 2 is CORRECT: The mission aims to create a comprehensive ecosystem, including supply chains, intellectual property, and equipment manufacturing. Statement 3 is CORRECT: The government has allocated ₹1,000 crore for the mission in FY27, as stated in the news summary.

2. Which of the following best describes the primary objective of the India Semiconductor Mission 2.0?

  • A.To solely focus on attracting foreign investment for semiconductor fabrication plants.
  • B.To develop a comprehensive ecosystem for semiconductor manufacturing, including supply chains and equipment manufacturing.
  • C.To promote software development related to semiconductor design.
  • D.To provide subsidies only to large multinational corporations in the semiconductor industry.
Show Answer

Answer: B

The India Semiconductor Mission 2.0 aims to develop a comprehensive ecosystem for semiconductor manufacturing. This includes not only attracting investments for fabrication plants but also focusing on developing supply chains, intellectual property, and equipment manufacturing within the semiconductor industry. The mission also supports research and development to enable cutting-edge skills and research.

3. Assertion (A): The India Semiconductor Mission 2.0 aims to create a comprehensive ecosystem for semiconductor manufacturing. Reason (R): The government intends to reduce reliance on foreign suppliers and strengthen national security through this mission. In the context of the above statements, which of the following is correct?

  • A.Both A and R are true, and R is the correct explanation of A.
  • B.Both A and R are true, but R is NOT the correct explanation of A.
  • C.A is true, but R is false.
  • D.A is false, but R is true.
Show Answer

Answer: A

Both the assertion and the reason are true. The India Semiconductor Mission 2.0 indeed aims to create a comprehensive ecosystem for semiconductor manufacturing. The reason provided, which is the government's intention to reduce reliance on foreign suppliers and strengthen national security, is a valid and correct explanation for the mission's objective.

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