A recent study has identified several critical risk factors hindering the development of the semiconductor industry in Bangladesh.

These include a lack of understanding of industry dynamics, weak decision-making in adapting to evolving scenarios, and an over-reliance on incentives and subsidies.

The study, titled ‘Developing Semiconductor Industry in Bangladesh,’ was released by the Metropolitan Chamber of Commerce and Industry (MCCI) in Dhaka.

Key challenges highlighted in the study encompass generic human resource development and excessive dependence on wage differentials and infrastructure.

The report also notes a lack of synchronization in actions, leading to weak specialization, insufficient focus on technology, innovation, and research and development (R&D), and a lack of performance-centric incentives and disciplinary measures.

Additionally, the superior performance of competing countries poses a significant risk. The study suggests that Bangladesh’s semiconductor sector could improve by offering education and training to students and graduates in relevant fields, such as electrical engineering, computer science, and physics, with the help of industry experts.

It also recommends providing R&D grants and fellowships at the master’s and PhD levels to support microchip design innovation and prototype development.

To foster local innovation, the report advises offering incentives to domestic producers in sectors like apparel, footwear, and agriculture, encouraging microchip-led improvements in products and processes. Strengthening links between academia and chip design entities is also recommended.

Bangladesh has the potential to export $10 billion worth of semiconductors by 2041, increasing the sector’s GDP contribution from 0.3% to 4.5%.

Semiconductors are the fourth most-traded products globally, following crude oil, motor vehicles and parts, and refined oil. In 2023, global semiconductor sales reached $526.8 billion, despite an 8.2% decline from the previous year’s record high of $574.1 billion. The industry is projected to grow into a $1 trillion market by 2030, presenting significant opportunities for Bangladesh.

The country can leverage its talent pool to create high-earning opportunities for graduates and diversify foreign earnings. A global shortage of skilled workers in the semiconductor sector, estimated at 67,000 in the US alone by 2030, underscores this potential.

Currently, Bangladesh hosts three firms in the chip design segment, employing around 400 designers and generating over $6 million in revenue. Luna Lighting, a Japanese-owned company, is the only chip-testing firm in the country.

Zunaid Ahmed Palak, state minister for the Ministry of Posts, Telecommunications and Information Technology, and Md Shamsul Arefin, secretary to the Information and Communication Technology Division, attended the study’s launch event. Farooq Ahmed, MCCI’s secretary-general and CEO, moderated the event, with Kamran T Rahman, MCCI president, and Simeen Rahman, MCCI vice-president, also speaking.

Yusuf Haque, chief technology officer and co-founder of eXo Imaging Inc. presented the keynote paper, while M Rokonuzzaman, professor of electrical and computer engineering at North South University, provided a presentation. Habibullah N Karim, senior vice president of MCCI, emphasized that the report serves as both an academic guide and a practical framework for mobilizing investment, shaping policy, and allocating resources in the semiconductor industry.