Saif
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The following video talks about the nascent semiconductor industry in Bangladesh.
[🇧🇩] Semiconductor Industry in Bangladesh
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Bangladesh Defense
- Jan 24, 2024
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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.
Saif
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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.
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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.
