The following video talks about the nascent semiconductor industry in Bangladesh.
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Bangladesh Defense ForumBangladesh not India is going to be the hub of semiconductor industry. The Netherlands has shown interest in building semiconductor factory in Bangladesh.
Bangladesh has made an entry into semiconductor industry with high hopes.
Semiconductor industry and the national security of Bangladesh.
Policy support can propel semiconductor industry growth
Currently, our exploration in this industry revolves around the IC chip design part. But if we are able to enter the semiconductor ecosystem, it is possible that Bangladesh’s revenue from the industry will be similar to current revenues earned from RMG
Electrical and Computer Engineer, Mohammed Enayetur Rahman. Sketch: TBS
The global semiconductor industry stands in a pretty decent and promising position today.
Much of the credit of this success can be attributed to the proactive support and strategic interventions from governments around the world. Interestingly, a big chunk of this $600 billion dollar market is dominated by the Asia-Pacific. So, now is a good time for Bangladesh to learn from its neighbours.
It is undeniable that technological progress will only create further demand for integrated circuit (IC) chips, and the market is projected to double in value by the end of the decade, becoming a $1 trillion industry.
This market deserves our serious attention for diversifying Bangladesh's economy in a more resilient and effective way to ensure sustained growth. Currently, our exploration in this industry revolves around the IC chip design part. But if we are able to enter the semiconductor ecosystem, which includes silicon wafer production, IC chip fabrication, IC chip packaging, assembly and testing, and integration into products as well, it's possible that Bangladesh's revenue from the semiconductor industry will be similar to the current revenue earned from the RMG sector.
However, to let that happen, our government needs to fuel our semiconductor industry.
Bangladesh currently earns around $5 million annually from the semiconductor industry, mostly by providing IC design services. Whereas the RMG sector contributes about $40 billion annually — a boom that is evidently a result of several decades of careful nurturing from the government.
Sectors like pharmaceuticals and active pharmaceutical ingredients, leather and leather goods, non-leather footwear, home textiles, and several others are also getting special attention from the government, and some have already crossed the billion-dollar mark regarding exports. If the semiconductor industry gets a similar policy focus, it will surely surpass the expressed ambition of the government — building a $10 billion semiconductor industry by 2031.
As mentioned above, some countries in the Asia-Pacific, including China, Taiwan, South Korea, Japan, Malaysia, Singapore, and our neighbour India are in relatively good positions in the market. The governments of these nations are investing heavily in this industry considering the massive demand leading China, Japan, Taiwan, and South Korea to be the 'Big 4' semiconductor players.
Recently Vietnam has been able to attract multi-billion-dollar foreign direct investment (FDI) in semiconductor manufacturing. The Philippines and India are also reaping the benefits from this trend.
India is already earning around $60 billion from the industry, and this is not by chance. The Indian government invested heavily in setting up IT-based universities to increase their skilled workforce and announced a $10 billion fund to strengthen the semiconductor industry in December 2021. These are the areas where we are also currently facing a shortage.
The Indian government also launched a programme called 'Semicon' to promote the production of semiconductors in the country. Under this programme, when setting up a semiconductor fabrication plant, the government extends fiscal support of up to 50% of the project cost to the approved applicants.
Their current push to develop India into a semiconductor manufacturing hub through Production Linked Incentive (PLI) and Design Linked Incentive (DLI) schemes under the umbrella of the India Semiconductor Mission (ISM) seems like a step in the right direction. India's 55,000 design engineers now account for 20% of the global chip design talent pool.
India is strong in design, opting for manufacturing, and already attracting major investments in the value chain.
In order to nurture our industry, the Bangladeshi government needs to take a similar stance. We can encourage local companies to start exploring IC chip packaging, assembly and testing. On the other hand, fabrication is highly sophisticated and needs a massive amount of capital and highly skilled engineers and researchers, which is not realistically feasible at this very moment. Although, with the aid of befitting policies, that too could very well become a reality in the future.
In the beginning, during the inception of ULKASEMI, it was very hard to make people understand that Bangladesh could design chips. But now the industry is already established. In order for it to grow, it now needs special attention, similar to how the RMG sector has been nurtured.
The government of Bangladesh has played an active role in designing policy support to the RMG sector, which was crucial to its success. This includes back-to-back L/C, bonded warehouse, cash incentives, export credit guarantee scheme, tax holiday and related facilities.
The RMG industry greatly benefits from reduced tax rates and other facilities. It experiences a lowered corporate income tax rate. The income tax rate for textile manufacturers is also reduced.
These initiatives have helped Bangladesh remain competitive in RMG exports. The bold, timely and focused policy support extended by the government has also saved the RMG industry from the unprecedented impacts of the Covid-19 pandemic.
For sustained and inclusive growth of the semiconductor industry in Bangladesh, we will need that amount of policy focus, including friendlier skill migration policies, and, in the process, open up dialogues with other countries, such as Taiwan, South Korea, and Japan, for partnership opportunities, the exchange of knowledge and experience, and skilled workers.
The government has already set up multiple IT villages, IT incubators, and ICT parks in the country. These parks facilitate easy terms with tax holidays for investors. By leveraging these investments, undeniably, we can be headed in the right direction. The blueprint for success has already been laid out for us by our neighbouring countries, particularly India. If we provide the semiconductor industry with the necessary support, Bangladesh can potentially become a notable player in the market before 2031.
Mohammed Enayetur Rahman is the founder, CEO, and president of ULKASEMI.
Bangladesh can become a semiconductor packaging hub
Bangladesh can position itself to be an active player, particularly in semiconductor packaging. The country has a good number of advantages, a key advantage being the availability of cheap labour. The country has a young workforce, which is an important asset.
Bangladesh can become a semiconductor packaging hub
PHOTO: REUTERS
Recently, there have been discussions going on in the country on developing a semiconductor manufacturing sector, in an effort to diversify our economy and accelerate economic growth. Semiconductor chips, or integrated circuit (IC) chips, are the brains of modern electronic devices. In 2020, more than 932 billion chips were produced in the world – that's more than 116 chips per person. You may be using more than 150 IC chips on a daily basis via your smartphone, depending on the model. In the era of Fourth Industrial Revolution (4IR), the demand for IC chips is only going to rise, which means semiconductor manufacturing will keep growing; the semiconductor market is expected to almost double in value, to become a USD 1 trillion industry, by the end of this decade.
Manufacturing IC chips and integrating them into commercial electronic devices constitute probably the most technologically advanced and complex manufacturing value chain. Simply put, the major steps in semiconductor manufacturing include: 1) IC chip design; 2) silicon wafer production; 3) IC chip fabrication; 4) IC chip packaging, assembly and testing; and 5) integration to systems/commercial products.
In Bangladesh, some IC design-related activities have started recently. But that is not the focus of this article. Out of the steps listed above, IC chip fabrication, also called front-end process, consists of highly sophisticated process steps that need huge capital (several billion US dollars), highly skilled engineers and scientists, and intense involvement in advanced research and development (R&D). Only a few companies in the world are able to do IC fabrication, such as TSMC, Intel, Samsung, Global Foundries, etc. At present, it is not realistic for Bangladesh to enter the IC chip fabrication sector. But what is doable right now is IC chip packaging, assembly and testing.
For simplicity, let's use "packaging" to refer to this step, which is also called back-end process. An IC chip, built on a thin single crystal silicon wafer, is vulnerable, fragile, and easily gets damaged when exposed to the ambient atmosphere. So, it must be secured in a package that provides the necessary protection against mechanical, thermal, and chemical damages. An IC chip cannot work on its own. Hence, the package must provide connection between the chip and other circuit components. The package must also dissipate the heat generated because of the current flowing through the chip so as not to overheat and destroy it.
An IC package is a highly complex engineered product that needs multidisciplinary science and engineering expertise to design and manufacture. A lot of value addition happens in this segment of semiconductor manufacturing. Forecast by Straits Research, a leading market research organisation, shows that Outsourced Semiconductor Assembly and Test (OSAT) services are growing at a compound annual growth rate of 8.5 percent, from $37.95 billion in 2021 to an estimated $72.90 billion in 2030.
IC packaging is technologically less demanding and labour-intensive. That is why this segment of semiconductor manufacturing was shifted from the West to the Asia-Pacific region in the early 1980s. Packaging has been thriving in this region that used to offer low wages – e.g. in Malaysia, China, Taiwan, etc. However, labour costs in these countries have risen over the years. IC packaging is again being shifted to new, lower-wage countries. Vietnam, taking advantage of this shift, has been able to attract multi-billion-dollar foreign direct investment (FDI) in semiconductor manufacturing. Companies like Intel, Samsung, LG, AmKor, Panasonic, Foxconn, etc have been investing heavily in high-tech parks in Vietnam. The Philippines is also reaping benefits from this trend. India, too, has entered the semiconductor industry very recently in an emphatic way.
Against this backdrop, Bangladesh can position itself to be an active player, particularly in semiconductor packaging. The country has a good number of advantages, a key advantage being the availability of cheap labour. The country has a young workforce, which is an important asset. The ongoing nationwide effort on the quality assurance of higher education should help convince investors in this tech-intensive sector about the supply of talents in engineering and science. Our solid experience in managing export-oriented industry in other sectors is a plus point as well.
Recent changes in the geopolitical scenario have been compelling the global semiconductor manufacturing sector to diversify its supply chain and relocate some of the process steps to countries that pose lower risks. Bangladesh can be a beneficiary of this development. The country may aim to attract a few prominent international players to bring in FDI by providing attractive tax and other incentives, and by ensuring ease of doing business. This needs consideration and solicitation at the highest level.
Policies should also be friendly to local entrepreneurs. Domestic entrepreneurs with lower budgets may explore the possibility of entering the IC packaging sector by targeting simpler products that require smaller investments. Established packaging manufacturers nowadays tend to target advanced packaging solutions like 2.5D/3D packaging, wafer level packaging, system-in-package, etc. This creates opportunities for smaller/newer players to produce simpler products – e.g. those based on surface-mount technology (SMT), quad-flat no-lead (QFN) package, etc.
The time is ripe for Bangladesh to explore the possibility of entering the lucrative semiconductor manufacturing sector in a substantial way. It may be worth mentioning again that semiconductor manufacturing is probably the most complex value chain there is. So, due diligence by investing time and efforts is vital to comprehend this sector of great promise. Intermingling with international players and experts to create a solid understanding will help in devising good policies and in targeting niche areas to engage in.
Dr A S M A Haseeb is professor at the Department of Nanomaterials and Ceramic Engineering of Bangladesh University of Engineering and Technology (Buet), and has R&D experience in semiconductor packaging in Malaysia in collaboration with industrial partners like NXP Semiconductors, STMicroelectronics, Motorola, etc.
Bangladesh wants to be semiconductor hub.
Semiconductor promises multibillion-dollar earnings
Startups now floating
DOULOT AKTER MALA
Published :
Mar 20, 2024 00:15Published :
Updated :
Mar 20, 2024 00:15Startups begin floating as multibillion-dollar semiconductor industry beacons Bangladesh having umpteen engineers coming out from nearly 95 educational institutions, pioneers say, as global economic powers scramble for sourcing chips.
Industry data show around 25,000 Electrical and Electronics Engineers and Computer Engineers are coming out annually with graduation or master's degree as resources that can help grab the potential in the fastest-growing global economy.
Industry people say Bangladesh can earn billions of dollar in chip designing or prefabrication stage by imparting training to the existing pool of engineers with government investment, which other countries like India, China, the USA are doing.
The $600-billion global semiconductor industry shows signs of booming to $1.0 trillion in size by 2030, says Mckinsey & Company.
Founder and CEO of Technohaven Company Ltd Habibullah N Karim, also former president of Bangladesh Association of Software and Information Services (BASIS), says Bangladesh has the potential to grab 3.0 to 4.0 per cent of the $1.0 trillion worth of semiconductor industry across the globe by grooming skilled manpower.
Currently, three companies in Bangladesh are engaged in chip designing, including two large ones named ULKASEMI and Neural Semiconductor Limited.
Primesilicon is another company in the latest techno industry doing prefabrication work for last 12-13 years.
Since commencing startup in 2007, ULKASEMI has now nearly 25 global clients, including big-name ones like Apple and Taiwan Semiconductor Manufacturing Company Limited (TSMC), where Bangladeshi engineers are supporting in chip designing.
Neural Semiconductor, a concern of DBL Group, has invested in VLSI Design and tied up with 27-28 universities to support resource buildup for this industry.
The firm ULKASEMI, headquartered in Cupertino (Silicon Valley), has obtained land at the Hitech Park in Kaliakoir to establish a semiconductor plant for testing and packaging in future.
Founder and Chief Executive Officer (CEO) of ULKASEMI Mohammad Enayetur Rahman, has observed a remarkable rise in work orders (specification negotiation) from global technological giants like Apple, Google and Facebook in recent times.
"Bangladesh's capacity has been well-established at prefabrication stage among the global clients," he says.
Mr Enayetur Rahman, one of the trailblazers in the fastest-growing field of knowledge economy, says they have observed a 50-percent growth in works during the last five years.
"Our target is achieving an annual growth of 20 to 30 per cent with support of the government in resource buildup," he told the FE writer.
The company has over 300 engineers in Bangladesh, 35 in Silicon Valley, USA, and 30 in Canada and looks to have 100 engineers in India, he said.
"This is a future knowledge-intensive industry. Modern world cannot think without semiconductors," says Mr Rahman, who has working experiences in Silicon Valley.
He feels the need for a separate cabinet body under the Prime Minister's Office (PMO) focused on semiconductor to oversee investment and plan governmental support mechanisms.
To substantiate he proposition he points out recent dilemma over determining the lead ministry for the knowledge-based industry.
The company supports chip designing from not only Bangladesh but also from other countries, too, due to meeting "clients' confidentiality".
Md Shakhawat Hossain, Chief Executive Officer (CEO) of Neural Semiconductor, says the company started off in 2017 with 20 engineers from BUET and now it has a pool of more than 100 engineering professionals.
"We are taking offices in the USA and Malaysia to meet the clients' requirement and explore the potential," he told this correspondent.
The company has four to five regular clients from the United States, Japan, and Malaysia, he added.
"Resource build-up needs a considerable amount of investment as obtaining licences for the training software is expensive," he said, echoing the call for government's fund support.
India is earning $40 billion by exporting chip designs, equivalent to Bangladesh's apparel export, he mentions as one instance of the potential the sector holds as it has linkage to world's most advanced manufacturing industries.
"We are now at takeoff stage of the knowledge-intensive industry where government's intervention is required for resource buildup on a massive scale as only fresh graduates cannot take up the task," he notes.
The company is working with 27/28 universities to help in developing skilled engineers by improving educational curriculum.
Mr Habibullah N Karim says country's IT companies usually operate with small capital while semiconductor industry needs billions of taka in investment to impart training.
"Matching grants of government for startup companies could help them to develop human resources."
A coordinated effort of private sector, academia and government could help develop a high-end pool of experts and encourage talented engineers to join the industry, he adds.
The CEO of MetroNet Bangladesh Ltd, Syed Almas Kabir, also former president of BASIS and Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI), mentions that neighbouring India has been proceeding towards fabrication of semiconductor while China, Malaysia, Taiwan and South Korea have fabrication plants.
More companies would be encouraged to grab the opportunity if the government extends fiscal support, tax breaks, he says.
He shared interest of Malaysian Governor in Penang during his visit to Malaysia earlier to hire electrical engineers from Bangladesh for semiconductor industry. Other countries are incentivizing their industry to grab the potential of semiconductor market and it is required in Bangladesh, too.
Taposh Kumar Mazumder, Executive Director of Walton Hi-tech Industries Limited, has said the company had a plan to invest in semiconductor industry but now it halted after the company found some barriers here.
"Semiconductor industry needs huge investment and uninterrupted supply-chain managements in a country," he added.
"People used to laugh at us at the beginning. Now we have clients like US tech-giant Apple, Taiwan's semiconductor-giant TSMC," says Md Muzammel Hossain, manager, branding and public relations, in ULKASEMI
The company has around 25-26 regular clients, which was only 10 in number five years back.
Golam Sarwar Bhuiya, Director (technical) of Hitech Park Authority, says they are planning to set up a testing laboratory as per investors' requirement for semiconductor industry.
Skill-development training would be imparted under a World Bank (WB) project, he says, emphasizing the authority's effort to attract more investment in hi-tech.
He agrees fabrication stage of semiconductors needs some policy supports, including intellectual property rights.
The ICT ministry is also working on framing a policy to facilitate growth of the industry, he says.
Shabbir A Khan, president of BMCCI, says some $300 billion worth of investment has been made in Malaysia, including Intel's $70 billion, in semiconductor industry.
"A delegation from Malaysia may visit Bangladesh in next two-three months to explore the possibility skills trainings here," he says.
Policy support can help earn $10b from semiconductor manufacture by 2041
Bangladesh would be able to earn $10 billion from semiconductor manufacturing by 2041 if proper policy support is ensured, according to Zunaid Ahmed Palak, state minister for telecom and ICT.
Policy support can help earn $10b from semiconductor manufacture by 2041
Says state minister for ICT
Bangladesh would be able to earn $10 billion from semiconductor manufacturing by 2041 if proper policy support is ensured, according to Zunaid Ahmed Palak, state minister for telecom and ICT.
The uses of microchip and nanochips is growing day by day, so with the right policy support, it will be possible to earn at least $10 billion from exporting semiconductor items by 2041, he said.
Semiconductors are materials with electrical conductivity between conductors and insulators.
Chips, or integrated circuits, are made from semiconductors and serve as the backbone of modern electronics, powering devices like computers, smartphones and other digital technologies through their intricate circuitry.
He said there is a need for a semiconductor policy for the faster development of this sector.
He also urged for an industry-academia collaboration to create a highly skilled and technologically advanced workforce compatible for this sector as the demand is very high at home and abroad.
Palak was speaking at a seminar, titled "Unleashing the potential of the semiconductor industry in Bangladesh", organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its office in the capital.
"We will focus on building 50,000 skilled manpower on microchip designing. Also, we are putting more emphasis on research and development," he said.
Palak informed that the government will invest in startups that work with chip design.
DCCI President Ashraf Ahmed suggested that for successful implementation of import substitution and export diversification, Bangladesh should prioritise the development of the semiconductor industry.
"Many countries are investing heavily in the semiconductor industry, creating a high demand for skilled workers," he said.
Besides, the government should focus on cultivating the skilled workforce required to meet the growing demand of the semiconductor industry in Bangladesh, he added.
He also underscored the importance of simplification of administrative procedures for setting up semiconductor businesses, including licensing, permits, and import/export regulations.
Mir Shahrukh Islam, managing director of Bondstein Technologies Ltd, said the semiconductor industry in Bangladesh is still at a very early stage.
"The high ambition of the government to scale it up to $1 billion from $5 million at present within the next six years would require significant improvement in the talent supply side," he said.
"We need to involve Bangladeshi diaspora global talents in the semiconductor industry to place ourselves in this niche market. Production linked subsidy is a must to attract FDI," Islam added.
ASMA Haseeb, a professor of nanomaterial and ceramic engineering at the Bangladesh University of Engineering and Technology, presented the keynote paper.
He said the global semiconductor market will reach $1,307.7 billion by 2032.
The main semiconductor manufacturing process includes design, chip fabrication, assembling, testing and packaging.
It is a labour-intensive industry and at least 81 percent of the world's semiconductor assembling, testing and packaging production is located in Asia.
Taiwan, South Korea, Singapore and India are few of the Asian countries that give special support to this sector in the form of grants, equity investment, favourable loans, R&D support, tax incentives etc.
But despite having a few design houses in Bangladesh with an annual market size of about $5 million, the local industry is yet to reach the expected level, Haseeb added.
GSM Jafarullah, managing director of the Bangladesh High-Tech Park Authority, Razib Hasan, co-founder and vice-president at Software Teton Private Ltd, Liakat Ali, additional managing director at Walton Digi-Tech Industries, and M Niaz Asadullah, a visiting professor at University of Reading, UK, also spoke.
Says state minister for ICT
Bangladesh would be able to earn $10 billion from semiconductor manufacturing by 2041 if proper policy support is ensured, according to Zunaid Ahmed Palak, state minister for telecom and ICT.
The uses of microchip and nanochips is growing day by day, so with the right policy support, it will be possible to earn at least $10 billion from exporting semiconductor items by 2041, he said.
Semiconductors are materials with electrical conductivity between conductors and insulators.
Chips, or integrated circuits, are made from semiconductors and serve as the backbone of modern electronics, powering devices like computers, smartphones and other digital technologies through their intricate circuitry.
He said there is a need for a semiconductor policy for the faster development of this sector.
He also urged for an industry-academia collaboration to create a highly skilled and technologically advanced workforce compatible for this sector as the demand is very high at home and abroad.
Palak was speaking at a seminar, titled "Unleashing the potential of the semiconductor industry in Bangladesh", organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its office in the capital.
"We will focus on building 50,000 skilled manpower on microchip designing. Also, we are putting more emphasis on research and development," he said.
Palak informed that the government will invest in startups that work with chip design.
DCCI President Ashraf Ahmed suggested that for successful implementation of import substitution and export diversification, Bangladesh should prioritise the development of the semiconductor industry.
"Many countries are investing heavily in the semiconductor industry, creating a high demand for skilled workers," he said.
Besides, the government should focus on cultivating the skilled workforce required to meet the growing demand of the semiconductor industry in Bangladesh, he added.
He also underscored the importance of simplification of administrative procedures for setting up semiconductor businesses, including licensing, permits, and import/export regulations.
Mir Shahrukh Islam, managing director of Bondstein Technologies Ltd, said the semiconductor industry in Bangladesh is still at a very early stage.
"The high ambition of the government to scale it up to $1 billion from $5 million at present within the next six years would require significant improvement in the talent supply side," he said.
"We need to involve Bangladeshi diaspora global talents in the semiconductor industry to place ourselves in this niche market. Production linked subsidy is a must to attract FDI," Islam added.
ASMA Haseeb, a professor of nanomaterial and ceramic engineering at the Bangladesh University of Engineering and Technology, presented the keynote paper.
He said the global semiconductor market will reach $1,307.7 billion by 2032.
The main semiconductor manufacturing process includes design, chip fabrication, assembling, testing and packaging.
It is a labour-intensive industry and at least 81 percent of the world's semiconductor assembling, testing and packaging production is located in Asia.
Taiwan, South Korea, Singapore and India are few of the Asian countries that give special support to this sector in the form of grants, equity investment, favourable loans, R&D support, tax incentives etc.
But despite having a few design houses in Bangladesh with an annual market size of about $5 million, the local industry is yet to reach the expected level, Haseeb added.
GSM Jafarullah, managing director of the Bangladesh High-Tech Park Authority, Razib Hasan, co-founder and vice-president at Software Teton Private Ltd, Liakat Ali, additional managing director at Walton Digi-Tech Industries, and M Niaz Asadullah, a visiting professor at University of Reading, UK, also spoke.
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Semiconductor boom-hope or hype?
In his book "Chip War: The Fight for the World's Most Critical Technology," noted American economic historian Chris Miller, argues, "Microchips are the new oil. This vital and precious resource has an even more profound impact on people's lives than oil". In the book, which has been named the Finan
Semiconductor boom-hope or hype?
ATIQUL KABIR TUHIN
Published :
Jun 05, 2024 22:34
Updated :
Jun 05, 2024 22:34
In his book "Chip War: The Fight for the World's Most Critical Technology," noted American economic historian Chris Miller, argues, "Microchips are the new oil. This vital and precious resource has an even more profound impact on people's lives than oil". In the book, which has been named the Financial Times Best Business Book of 2022, he says microchips are "the most complex piece of machinery ever assembled by humans, and there is no other item with a greater influence on globalization and international politics."
To put it simply, the microchip, also known as an integrated circuit (IC), is a small piece of silicon that contains a complex network of electronic circuits. These chips are fundamental building blocks of modern electronic devices for a vast array of functionalities. Their demand is currently exceeding all initial expectations. From guiding complex missiles to heating your morning coffee, microchips are the hidden heroes behind everything from smartphones and televisions to the refrigerators and washing machines that keep our modern lives running smoothly. What's intriguing is their capability to manage numerous tasks, including processing, memory, storage, logic control, digital communication, sensing and detection, and power management. As technological progress marches forward, semiconductors are poised to become even more integral to the majority of devices used by humans in the future.
The global semiconductor market is a trillion-dollar powerhouse in the making, surging at 20 per cent annually. It is no surprise tthat a fierce global race is on. Tech giants like the US, China, South Korea, and Japan are pouring billions into securing their slice of the pie by increasing domestic chip production. Fueled by the US-China tech war and potential disruptions in Taiwan, the race for semiconductor dominance has become a top global priority.
To read the rest of the news, please click on the link above.
ATIQUL KABIR TUHIN
Published :
Jun 05, 2024 22:34
Updated :
Jun 05, 2024 22:34
In his book "Chip War: The Fight for the World's Most Critical Technology," noted American economic historian Chris Miller, argues, "Microchips are the new oil. This vital and precious resource has an even more profound impact on people's lives than oil". In the book, which has been named the Financial Times Best Business Book of 2022, he says microchips are "the most complex piece of machinery ever assembled by humans, and there is no other item with a greater influence on globalization and international politics."
To put it simply, the microchip, also known as an integrated circuit (IC), is a small piece of silicon that contains a complex network of electronic circuits. These chips are fundamental building blocks of modern electronic devices for a vast array of functionalities. Their demand is currently exceeding all initial expectations. From guiding complex missiles to heating your morning coffee, microchips are the hidden heroes behind everything from smartphones and televisions to the refrigerators and washing machines that keep our modern lives running smoothly. What's intriguing is their capability to manage numerous tasks, including processing, memory, storage, logic control, digital communication, sensing and detection, and power management. As technological progress marches forward, semiconductors are poised to become even more integral to the majority of devices used by humans in the future.
The global semiconductor market is a trillion-dollar powerhouse in the making, surging at 20 per cent annually. It is no surprise tthat a fierce global race is on. Tech giants like the US, China, South Korea, and Japan are pouring billions into securing their slice of the pie by increasing domestic chip production. Fueled by the US-China tech war and potential disruptions in Taiwan, the race for semiconductor dominance has become a top global priority.
To read the rest of the news, please click on the link above.
Can Bangladesh be a semiconductor hub?
The semiconductor manufacturing sector is well-known for its complexity, high stakes and intense corporate competition. Demand has always been driven by innovation, with every new technology changing the game.
Can Bangladesh be a semiconductor hub?
The semiconductor manufacturing sector is well-known for its complexity, high stakes and intense corporate competition. Demand has always been driven by innovation, with every new technology changing the game.
Right now, artificial intelligence (AI) is leading the way in innovation and has the potential to catapult the semiconductor industry into a new growth trajectory. Specialised hardware, or semiconductors designed with AI in mind, will be essential for enabling AI applications. In the near future, the need for AI-specific chips will soar due to the expanding need for instant computing, seamless connectivity, and advanced sensing capabilities.
Asia has a market share of approximately 90 percent in chip assembly and testing, and more than 75 percent of the world's capacity for fabricating semiconductors is based here. Taiwan is a dominant force in the industry, holding a 68 percent market share and is home to numerous cutting-edge chip manufacturing facilities.
Nearly 90 percent of the cutting-edge chips for AI and quantum computing in use today are produced by TSMC, a well-known Taiwan manufacturer.
India has made significant progress with initiatives like "Make in India" and substantial investments in semiconductor plants, aiming to become a global hub. In the 2024 interim union budget, India substantially increased funding for semiconductor and display manufacturing support.
The Indian semiconductor market, valued at $34.3 billion in 2023, is forecasted to surge to $100.2 billion by 2032. Micron, a prominent American chip company, has pledged $825 million for a facility in India, expecting to generate more than 300,000 jobs by 2026.
In the midst of the chip competition between China and the United States, Vietnam seeks to draw investment by bolstering its semiconductor industry through tax breaks and incentives. Grants and collaborative research with private firms such as FPT are planned.
Vietnam is home to Intel's main facility, but it also wants to draw in other companies like Samsung and Nvidia. By 2030, the government wants to train 50,000 engineers and added semiconductors to national development initiatives. The country may become a major player in the semiconductor supply chain.
Bangladesh is witnessing a nascent emergence of the semiconductor industry, which forms the foundation of contemporary electronics. It is venturing into the semiconductor space because of growing demand for electronics worldwide and a deliberate drive towards digitalisation. Currently, the industry is mainly focused on low-end assembly and testing rather than high-end semiconductor manufacturing.
The country must take care of its vital infrastructure requirements if it hopes to develop a competitive semiconductor industry. To create a workforce with the necessary skills and knowledge, technical education and training must be improved. This development can be facilitated through collaborations with leading global educational institutions and professionals.
Research centres specialising in semiconductor technology and grants for university and industry research serve as growth-promoting factors for research and development. It takes a significant financial commitment to build cutting-edge fabrication facilities, but this can be accomplished with public-private partnerships and incentives for foreign investment.
It is essential to establish a thorough supply chain that includes vendors of machinery, components, and raw materials. This ecosystem can be developed by supporting startups and encouraging relevant companies to enter this market.
Additionally, implementing policies that support the semiconductor industry like tax incentives, befitting regulations, and protection of intellectual property rights, can attract and retain investments.
The semiconductor manufacturing sector is well-known for its complexity, high stakes and intense corporate competition. Demand has always been driven by innovation, with every new technology changing the game.
Right now, artificial intelligence (AI) is leading the way in innovation and has the potential to catapult the semiconductor industry into a new growth trajectory. Specialised hardware, or semiconductors designed with AI in mind, will be essential for enabling AI applications. In the near future, the need for AI-specific chips will soar due to the expanding need for instant computing, seamless connectivity, and advanced sensing capabilities.
Asia has a market share of approximately 90 percent in chip assembly and testing, and more than 75 percent of the world's capacity for fabricating semiconductors is based here. Taiwan is a dominant force in the industry, holding a 68 percent market share and is home to numerous cutting-edge chip manufacturing facilities.
Nearly 90 percent of the cutting-edge chips for AI and quantum computing in use today are produced by TSMC, a well-known Taiwan manufacturer.
India has made significant progress with initiatives like "Make in India" and substantial investments in semiconductor plants, aiming to become a global hub. In the 2024 interim union budget, India substantially increased funding for semiconductor and display manufacturing support.
The Indian semiconductor market, valued at $34.3 billion in 2023, is forecasted to surge to $100.2 billion by 2032. Micron, a prominent American chip company, has pledged $825 million for a facility in India, expecting to generate more than 300,000 jobs by 2026.
In the midst of the chip competition between China and the United States, Vietnam seeks to draw investment by bolstering its semiconductor industry through tax breaks and incentives. Grants and collaborative research with private firms such as FPT are planned.
Vietnam is home to Intel's main facility, but it also wants to draw in other companies like Samsung and Nvidia. By 2030, the government wants to train 50,000 engineers and added semiconductors to national development initiatives. The country may become a major player in the semiconductor supply chain.
Bangladesh is witnessing a nascent emergence of the semiconductor industry, which forms the foundation of contemporary electronics. It is venturing into the semiconductor space because of growing demand for electronics worldwide and a deliberate drive towards digitalisation. Currently, the industry is mainly focused on low-end assembly and testing rather than high-end semiconductor manufacturing.
The country must take care of its vital infrastructure requirements if it hopes to develop a competitive semiconductor industry. To create a workforce with the necessary skills and knowledge, technical education and training must be improved. This development can be facilitated through collaborations with leading global educational institutions and professionals.
Research centres specialising in semiconductor technology and grants for university and industry research serve as growth-promoting factors for research and development. It takes a significant financial commitment to build cutting-edge fabrication facilities, but this can be accomplished with public-private partnerships and incentives for foreign investment.
It is essential to establish a thorough supply chain that includes vendors of machinery, components, and raw materials. This ecosystem can be developed by supporting startups and encouraging relevant companies to enter this market.
Additionally, implementing policies that support the semiconductor industry like tax incentives, befitting regulations, and protection of intellectual property rights, can attract and retain investments.
Can Bangladesh become a semiconductor nation?
Abdullah Al MasudAbdullah Al Masud
Publish : 10 Jun 2024, 10:52 AMUpdate : 10 Jun 2024, 10:52 AM
Global semiconductor industry is passing through exciting times, characterized by heightened expectations for market growth, accompanied by a rat-race to secure resources and talents to fend off any potential disruptions in the supply of microchips to the global technology machines. Fueled by relentless innovation in artificial intelligence-based computing solutions, automotive and miniature electronics, and Internet of Things (IOTs), resulting into enhanced usage of complex microchips or integrated circuits (ICs) in any device one can possibly imagine, the global market for chips is projected to grow, according to McKinsey estimates, to more than $1 trillion by 2030, from its current $600 billion annually.
Resurgent market demand and increased government incentives have led to upsurge in chip making foundries, expanding the global capacity at an unprecedented rate.
Due to this high potential growth in a relatively short future, there is going to be a lot more demand for chip making foundry, chip designing and packaging and testing capacities in the future. Though the semiconductor industry is also seeing new innovations in the way chip is developed and produced, the existing segmentation in front end and back end will command entry of new players, most likely gravitating to the existing geographic locations and allowing for new entrants too, particularly due to the economic and political need for diversifying the production base, compounded to a large extent by the fallout from the US-China geo-political tensions leading to the US-China chip war. Much of the growth will gravitate towards existing geographies, however new entrants such as India and Vietnam in the Asia region, are also taking initiatives to attract enhanced investment alluring global chip manufacturing companies with government sponsored incentives.
Bangladesh does not want to be left behind. Media reports indicate that the government desires to raise exports of semiconductor products to $10bn by 2031.
Bangladeshi chip design companies are currently engaged in chip design services to global companies. One may find it interesting that a Bangladeshi company, Ulkasemi, designed chips for big-name companies that included Apple too, being the largest and oldest Bangladeshi owned chip design services company. Ulkasemi started in Bangladesh and extended to Silicon Valley, and then to other global locations, such as in Ontario and Bengaluru. The company maintains a large design centre that adheres to strict quality and security protocols where a bustling team of Bangladeshi young engineers create chip design solutions for the global technology companies. Ulkasemi is a TSMC Design Center Alliance (DCA) partner, TSMC being the world's largest producer of semiconductors and the main supplier of tech-companies, having 53% of global market share alone currently. In addition to being a partner of TSMC, Ulkasemi also works with almost all the major globally known foundries, which include Intel, Micron, Global Foundry, and Texas Instruments too.
Given the potential, Bangladeshi entrepreneurs and policy makers are seriously considering how Bangladesh can make a foray into the growing world market for semiconductors and related products. Admittedly, countries that can make an inroad into this industry will be the ones driving the world economies in the future years, as semiconductors are aptly considered the new "oil."
The technology mix and the positioning within the value-chain targeting a product segment or segments will be a critical determinant for gradual evolution into a sustaining manufacturing base from an initial start point. According to an industry expert I met at an international semiconductor event, who holds a key position in one of the world's top semiconductor equipment manufacturing companies, it is essential to locate the right "sweet spot" for entry. Given that the semiconductor industry is extremely knowledge intensive and sensitive to complex technology know-how and skills, and the right ecosystem that supports the industry is essential for potential success. One of the important elements is the supply network of the support vendors. In our neighbouring country, India, vendors are now creating presence, however it may be costly to have such a network unless there is an existing industry base or a critical mass of customers.
Establishing fabrication foundries, or fabs in short, requires substantial capital investments, necessitating thorough research and evaluation before committing resources. Due to the high cost and complexity of wafer fabrication, semiconductor has historically been concentrated in a few key geographies where a robust ecosystem supported the agglomeration of semiconductor firms. Countries with established semiconductor industries have developed extensive infrastructure, economies of scale, and government support, including financial incentives and intellectual property protection.
The manufacturing industry is divided into two primary stages: the front end (wafer fabrication) and the back end (assembly, testing, and packaging). The front end is more automated and capital-intensive, whereas the back end is labour-intensive.
Geopolitical tensions, particularly between the US and China, are prompting semiconductor companies to reconsider and diversify their production locations. Global consulting company, Kearney, in an analysis of Front-End Semiconductor Manufacturing Attractiveness Index, highlights three major factors influencing fab location decisions:
Business environment: Includes legal/regulatory frameworks, intellectual property protection, innovation outlook, and availability of skilled talent.
Incentives: Governments offer various incentives to attract semiconductor companies, such as tax breaks, subsidies, and utility deals.
Operating costs: Considers labour, utilities, and supply chain expenses crucial for the long-term viability of fab operations.
Among the established front-end manufacturing hubs, ie fabrication foundry countries, Taiwan and South Korea remain in the top spots of the attractiveness index, currently accounting for a total of 63% of the global semiconductor market, including all kinds of foundries. The high-end Asian alternatives are Japan and Singapore. Both have a high technology ecosystem and high government subsidy programmes, however none can match the cost advantages of Taiwan and South Korea. Among the established Western countries, the United States, Germany and France are the frontrunners, however these countries have some of the highest operating costs, nearly 40 % more than their Asian counterparts. Malaysia is among the top five countries, and has been branded as the low-cost overachiever by Kearney.
Among the emergent destinations that are poised as promising options for front-end manufacturing, India and Vietnam top the list considering the factors influencing the attractiveness index. These countries compensate for their lack of front-end fabrication experience and comparatively less robust business environments by offering generous subsidies and relatively low operational costs.
Industry analysts consider that now is the best time to make a foothold in the industry as there is unprecedented demand for new fabs and services, and many countries which are investing in capacity development at present will end up as gravitational geographies where the industry will likely locate in the future years. The agglomeration economies benefit the current industrial base of Malaysia in electric and electronics, South Korea and Taiwan in semiconductors -- these three countries have benefitted in the recent years from their respective comparative advantages in the cited sectors, which were cultivated through targeted policies and practices.
From the heydays of geographic concentration in a few hubs, the enhanced demand for chips have led to increased fragmentation and geographical dispersal in chip productions, compounded by global factors related to the geo-political tensions mentioned above. As a result, the global market for semiconductor is witnessing new entrants leading to growth in production of chips and services, and the semiconductor producing countries are pursuing their efforts to create conducive ecosystems to grab enhanced share of the chip market.
There are reasons to be optimistic about the future of the industry, nevertheless there are inherent risks too, since the technology in the semiconductor value-chain is extremely complex, only a few countries and companies could master the know-how and build super-charging ecosystems. In the race to create footholds, the countries will be required to continuously assess evolving market conditions and devise strategies to adapt to the new market conditions.
By targeting back-end manufacturing and fostering collaboration with other semiconductor-producing countries, Bangladesh can harness its young, ambitious workforce to capitalize on the industry's growth potential
How Bangladesh can grab a share
Bangladesh was not included in the list of attractive countries for front-end manufacturing, arguably due to the relative absence of the factors influencing the attractiveness index. However, this is front-end manufacturing or foundry, Bangladesh will be better off focusing on the back-end, ie packaging and testing, and chip design segment.
Bangladesh already has a chip design service industry, though a miniscule of the globally almost $50bn, which is projected to grow to more than $84bn by 2030. Among the few players, Ulkasemi has been able to achieve the crowning success, being the oldest and the largest in Bangladesh, as mentioned above. The founder and owner is a Bangladeshi American based in Silicon Valley and a veteran of the chip design industry, who gained long experience working in AMD and few start-up companies. Ulkasemi's technology prowess and market network gained considerable traction and the company leads the way into the chip design services from the heartland of Bangladesh to the world of tech-companies globally.
Given this head-start, Bangladesh can utilize the experience in chip design gained by Ulkasemi and others, to augment the size of the industry and train more and more engineers suited for work in the chip design services industry. Unlike the manufacturing segment of the chip industry value-chain, there are relatively low barriers to entry in the chip design services market and the scale of investment needed to make a headway is relatively lower than the staggering capitals required for a foundry and packaging and testing industry. Of course, the human capital and market network have to be there to gain traction. Bangladeshi diaspora, particularly professionals who gained significant experience in working with semiconductor companies, potentially can be instrumental in making a breakthrough.
To read the rest of the news, please click on the link above.
Abdullah Al MasudAbdullah Al Masud
Publish : 10 Jun 2024, 10:52 AMUpdate : 10 Jun 2024, 10:52 AM
Global semiconductor industry is passing through exciting times, characterized by heightened expectations for market growth, accompanied by a rat-race to secure resources and talents to fend off any potential disruptions in the supply of microchips to the global technology machines. Fueled by relentless innovation in artificial intelligence-based computing solutions, automotive and miniature electronics, and Internet of Things (IOTs), resulting into enhanced usage of complex microchips or integrated circuits (ICs) in any device one can possibly imagine, the global market for chips is projected to grow, according to McKinsey estimates, to more than $1 trillion by 2030, from its current $600 billion annually.
Resurgent market demand and increased government incentives have led to upsurge in chip making foundries, expanding the global capacity at an unprecedented rate.
Due to this high potential growth in a relatively short future, there is going to be a lot more demand for chip making foundry, chip designing and packaging and testing capacities in the future. Though the semiconductor industry is also seeing new innovations in the way chip is developed and produced, the existing segmentation in front end and back end will command entry of new players, most likely gravitating to the existing geographic locations and allowing for new entrants too, particularly due to the economic and political need for diversifying the production base, compounded to a large extent by the fallout from the US-China geo-political tensions leading to the US-China chip war. Much of the growth will gravitate towards existing geographies, however new entrants such as India and Vietnam in the Asia region, are also taking initiatives to attract enhanced investment alluring global chip manufacturing companies with government sponsored incentives.
Bangladesh does not want to be left behind. Media reports indicate that the government desires to raise exports of semiconductor products to $10bn by 2031.
Bangladeshi chip design companies are currently engaged in chip design services to global companies. One may find it interesting that a Bangladeshi company, Ulkasemi, designed chips for big-name companies that included Apple too, being the largest and oldest Bangladeshi owned chip design services company. Ulkasemi started in Bangladesh and extended to Silicon Valley, and then to other global locations, such as in Ontario and Bengaluru. The company maintains a large design centre that adheres to strict quality and security protocols where a bustling team of Bangladeshi young engineers create chip design solutions for the global technology companies. Ulkasemi is a TSMC Design Center Alliance (DCA) partner, TSMC being the world's largest producer of semiconductors and the main supplier of tech-companies, having 53% of global market share alone currently. In addition to being a partner of TSMC, Ulkasemi also works with almost all the major globally known foundries, which include Intel, Micron, Global Foundry, and Texas Instruments too.
Given the potential, Bangladeshi entrepreneurs and policy makers are seriously considering how Bangladesh can make a foray into the growing world market for semiconductors and related products. Admittedly, countries that can make an inroad into this industry will be the ones driving the world economies in the future years, as semiconductors are aptly considered the new "oil."
The technology mix and the positioning within the value-chain targeting a product segment or segments will be a critical determinant for gradual evolution into a sustaining manufacturing base from an initial start point. According to an industry expert I met at an international semiconductor event, who holds a key position in one of the world's top semiconductor equipment manufacturing companies, it is essential to locate the right "sweet spot" for entry. Given that the semiconductor industry is extremely knowledge intensive and sensitive to complex technology know-how and skills, and the right ecosystem that supports the industry is essential for potential success. One of the important elements is the supply network of the support vendors. In our neighbouring country, India, vendors are now creating presence, however it may be costly to have such a network unless there is an existing industry base or a critical mass of customers.
Establishing fabrication foundries, or fabs in short, requires substantial capital investments, necessitating thorough research and evaluation before committing resources. Due to the high cost and complexity of wafer fabrication, semiconductor has historically been concentrated in a few key geographies where a robust ecosystem supported the agglomeration of semiconductor firms. Countries with established semiconductor industries have developed extensive infrastructure, economies of scale, and government support, including financial incentives and intellectual property protection.
The manufacturing industry is divided into two primary stages: the front end (wafer fabrication) and the back end (assembly, testing, and packaging). The front end is more automated and capital-intensive, whereas the back end is labour-intensive.
Geopolitical tensions, particularly between the US and China, are prompting semiconductor companies to reconsider and diversify their production locations. Global consulting company, Kearney, in an analysis of Front-End Semiconductor Manufacturing Attractiveness Index, highlights three major factors influencing fab location decisions:
Business environment: Includes legal/regulatory frameworks, intellectual property protection, innovation outlook, and availability of skilled talent.
Incentives: Governments offer various incentives to attract semiconductor companies, such as tax breaks, subsidies, and utility deals.
Operating costs: Considers labour, utilities, and supply chain expenses crucial for the long-term viability of fab operations.
Among the established front-end manufacturing hubs, ie fabrication foundry countries, Taiwan and South Korea remain in the top spots of the attractiveness index, currently accounting for a total of 63% of the global semiconductor market, including all kinds of foundries. The high-end Asian alternatives are Japan and Singapore. Both have a high technology ecosystem and high government subsidy programmes, however none can match the cost advantages of Taiwan and South Korea. Among the established Western countries, the United States, Germany and France are the frontrunners, however these countries have some of the highest operating costs, nearly 40 % more than their Asian counterparts. Malaysia is among the top five countries, and has been branded as the low-cost overachiever by Kearney.
Among the emergent destinations that are poised as promising options for front-end manufacturing, India and Vietnam top the list considering the factors influencing the attractiveness index. These countries compensate for their lack of front-end fabrication experience and comparatively less robust business environments by offering generous subsidies and relatively low operational costs.
Industry analysts consider that now is the best time to make a foothold in the industry as there is unprecedented demand for new fabs and services, and many countries which are investing in capacity development at present will end up as gravitational geographies where the industry will likely locate in the future years. The agglomeration economies benefit the current industrial base of Malaysia in electric and electronics, South Korea and Taiwan in semiconductors -- these three countries have benefitted in the recent years from their respective comparative advantages in the cited sectors, which were cultivated through targeted policies and practices.
From the heydays of geographic concentration in a few hubs, the enhanced demand for chips have led to increased fragmentation and geographical dispersal in chip productions, compounded by global factors related to the geo-political tensions mentioned above. As a result, the global market for semiconductor is witnessing new entrants leading to growth in production of chips and services, and the semiconductor producing countries are pursuing their efforts to create conducive ecosystems to grab enhanced share of the chip market.
There are reasons to be optimistic about the future of the industry, nevertheless there are inherent risks too, since the technology in the semiconductor value-chain is extremely complex, only a few countries and companies could master the know-how and build super-charging ecosystems. In the race to create footholds, the countries will be required to continuously assess evolving market conditions and devise strategies to adapt to the new market conditions.
By targeting back-end manufacturing and fostering collaboration with other semiconductor-producing countries, Bangladesh can harness its young, ambitious workforce to capitalize on the industry's growth potential
How Bangladesh can grab a share
Bangladesh was not included in the list of attractive countries for front-end manufacturing, arguably due to the relative absence of the factors influencing the attractiveness index. However, this is front-end manufacturing or foundry, Bangladesh will be better off focusing on the back-end, ie packaging and testing, and chip design segment.
Bangladesh already has a chip design service industry, though a miniscule of the globally almost $50bn, which is projected to grow to more than $84bn by 2030. Among the few players, Ulkasemi has been able to achieve the crowning success, being the oldest and the largest in Bangladesh, as mentioned above. The founder and owner is a Bangladeshi American based in Silicon Valley and a veteran of the chip design industry, who gained long experience working in AMD and few start-up companies. Ulkasemi's technology prowess and market network gained considerable traction and the company leads the way into the chip design services from the heartland of Bangladesh to the world of tech-companies globally.
Given this head-start, Bangladesh can utilize the experience in chip design gained by Ulkasemi and others, to augment the size of the industry and train more and more engineers suited for work in the chip design services industry. Unlike the manufacturing segment of the chip industry value-chain, there are relatively low barriers to entry in the chip design services market and the scale of investment needed to make a headway is relatively lower than the staggering capitals required for a foundry and packaging and testing industry. Of course, the human capital and market network have to be there to gain traction. Bangladeshi diaspora, particularly professionals who gained significant experience in working with semiconductor companies, potentially can be instrumental in making a breakthrough.
To read the rest of the news, please click on the link above.
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