Bangladesh has set its sights on the global semiconductor market, with an ambitious plan to boost export earnings from the sector to $1 billion by 2030. The Bangladesh Semiconductor Industry Association (BSIA) announced the target as part of a roadmap to establish the country as a viable player in the high-tech industry.
The plan, which relies heavily on workforce development and government support, comes as Bangladesh’s semiconductor exports remain modest, earning around $8 million annually in 2024.
Building Foundations for Growth
BSIA President M.A. Jabbar acknowledged the challenges but expressed optimism about meeting the target. “This is achievable if we focus on developing skilled engineers, advocating for policy reform, and advancing local research and development,” he said at a conference in Silicon Valley earlier this week.
The event, attended by around 70 Bangladeshi expatriate semiconductor experts and industry leaders, explored how the country could tap into the rapidly growing global semiconductor market. Valued at $670 billion in 2023, the market is expected to surpass $1 trillion by the end of the decade.
At present, Bangladesh’s semiconductor sector is centred on integrated circuit (IC) design services, provided by a handful of firms, including Ulkasemi, Neural Semiconductor, and Prime Silicon. Collectively, these companies employ nearly 700 chip designers, a number the BSIA hopes to expand to 10,000 in the next five years.
Learning from Regional Success Stories
The announcement reflects Bangladesh’s desire to emulate the success of its regional neighbours, who have established themselves in the semiconductor value chain. India, for instance, has built a $60 billion semiconductor industry through government support and a focus on workforce training. Initiatives like the India Semiconductor Mission and production-linked incentives have positioned India as a hub for chip design and manufacturing.
Vietnam, Malaysia, and the Philippines have also made strides, attracting billions in foreign direct investment (FDI) by fostering favourable business environments and offering incentives to global technology firms.
Bangladesh’s current incentives, including a 10% cash benefit for IT-enabled exports, fall short of the levels offered by these nations during the early stages of their semiconductor industries. Experts have urged the government to increase support to help the country remain competitive.
Strategic Opportunities
The semiconductor industry, a critical component of modern technology, underpins sectors ranging from consumer electronics to automotive manufacturing. As demand for microchips grows, Bangladesh’s focus on the industry could pave the way for significant economic diversification.
A recent report by the Metropolitan Chamber of Commerce and Industry (MCCI) suggests that Bangladesh could generate $10 billion annually from the semiconductor sector by 2041. Achieving this would require substantial investment—an estimated $1 billion in public funds to attract matching private capital.
For now, experts recommend a phased approach. The country’s current strength in chip design could serve as a stepping stone to higher-value activities, such as chip testing, packaging, and eventually manufacturing.
Challenges Ahead
Despite its potential, Bangladesh faces steep challenges. The semiconductor industry is highly capital-intensive and requires a skilled workforce and sophisticated infrastructure. Industry insiders have highlighted the high cost of essential tools, such as design software, which often proves prohibitive for local companies.
Speaking to reporters, Md Shakhawat Hossain, CEO of Neural Semiconductor, called for greater government support. “We need subsidies and tax breaks to compete with countries like India and Malaysia. Without an enabling ecosystem, achieving these targets will be difficult,” he said.
The BSIA has also urged universities to expand training programs in Very Large Scale Integration (VLSI) technology, the cornerstone of semiconductor design. While several universities in Bangladesh offer courses in the subject, industry leaders believe stronger collaboration between academia and the private sector is necessary.
Bangladesh’s success in the ready-made garments (RMG) sector, which now contributes $40 billion annually to exports, serves as a potential model for the semiconductor industry. Decades of government support, including tax incentives and infrastructure investments, helped the RMG sector become globally competitive. Experts argue that a similar approach could accelerate the growth of Bangladesh’s semiconductor ambitions.
Conclusion
While the $1 billion target by 2030 is ambitious, it underscores Bangladesh’s determination to diversify its economy and move into high-value industries. With the right investments and policy reforms, the country could position itself as a key player in the global semiconductor supply chain, much as it has in other export-driven sectors.
