With some support, a slice of $600b semiconductor market can be ours

After graduating from Buet in 1977, Mohammed Enayetur Rahman went to Oregon State University in the United States of America to study Electrical Engineering and Computer Science.

He then joined AMD, the famous American multinational semiconductor company as a semiconductor chip designer. After leaving AMD, Enayetur returned to Bangladesh and started Ulkasemi, a semiconductor designing company, in Dhaka with only four engineers in 2008.

At the time the market for semiconductors was around $248.5 billion according to Statista.

Enayetur could easily be described as the first mover: the pioneer in a market that has since grown to a staggering $600 billion in the decade-and-a-half since Enayetur started.

The engineer could also be described as highly intuitive. The semiconductor industry is now considered the most promising industry of the 21st century.

A semiconductor, also known as microchip, is used in all electronic devices from computers, smartphones, washing machines, electric tea kettle to automobiles and warplane missile systems and has become part of modern life at all levels.

In the future, with the rise of technological innovation, it would be needed to manufacture almost all devices for human use.

While the market has so far been catered to by newcomers – Ulkasemi, Neural Semiconductor, Prime Silicon and Toton Electronics – in Bangladesh, two new big players in ACI and Walton are also set to enter the market which is expected to hit the mammoth trillion-dollar mark by 2030.

According to McKinsey, a global consultancy firm, the global semiconductor market reached $600 billion in 2021, with growth of more than 20%.

Despite the bounties the industry has to offer, the budget for the fiscal 2021-22 made no mention of the semiconductor industry, nor were any policy support announced.

Enayetur Rahman said, "In the beginning, it was very hard to make people understand that Bangladesh could produce chips. But now the industry is growing and it needs special attention."

Enayetur, whose company now employs 300 engineers and wants to hire 500 by 2024, urged the government to provide special incentives to the sector like the neighbouring India does.

Dr Farseem Mannan Mohammedy, professor of electrical and electronic engineering at Bangladesh University of Engineering Technology (Buet), told The Business Standard, "Bangladesh earns about $5 million annually through designing semiconductor chips. But neighbouring India is earning $60 billion from this sector."

India's envious standing is not by chance. Apart from the country's investment into setting up IT-based universities, the Indian government also announced a $1,000 crore fund to strengthen the semiconductor industry in December last year.

The industry has the potential to leave the current highest foreign currency earner garments industry in the dust.

"In Bangladesh, less than one lakh people in the semiconductor sector would be able to earn more than what 40 lakh people do in the RMG sector," Dr Farseem said.

"Intel employs 500 people from Bangladesh. This is brain drain. If we could establish an industry here, then those people could return. But this technology-based industry can never be fully developed without the special attention of the government. Because, this industry needs a lot of investment," he added.

According to government officials, initiatives are being undertaken.

Bikarna Kumar Ghosh, managing director of the Bangladesh Hi-Tech Park Authority, said, "The government has set up 10-12 IT villages, silicon city, electronic city, IT incubators and ICT parks in the country, including the Bangabandhu High-Tech Park and the Jashore Software Technology Park. These parks are providing plots on easy terms with tax holiday facilities to the investors.

"Recently, Ulkasemi has taken land in Bangabandhu Hi-Tech Park. We are ready to help them."

The rise of the 'conductors'

Didar Islam, who worked in the Silicon Valley, USA in the 1980s for more than a decade, was the first person to invest in the semiconductor sector in Bangladesh some 15 years back with his company Power IC. Their initial plan was to build a fabrication facility.

However, Didar's project faced various obstacles and he later started another company Solaric, which is now working on solar power in the country.

Enayetur, on the other hand, enjoyed much more success with his Ulkasemi.

It started with its headquarter based in Silicon Valley, USA. The company has been working on circuit design and layout since 2008. It has been involved in chip design and verification work since 2012.

Since its inception, it has opened two more offices in Toronto, Canada and in Bangalore, India to meet increasing work orders.

In 2021, Ulkasemi became the design centre alliance partner of TMSC, one of the leading semiconductor companies in the world. Only 20 companies in the world are affiliated with the design centre alliance of TMSC.

Ulkasemi has also announced a $25 million investment for semiconductor design service in Bangabandhu Hi-Tech Park.

Meanwhile, Neural Semiconductor Limited is a sister concern of DBL Group which is one of the leading RMG companies in the country.

Neural Semiconductor began its journey in 2017. It initially hired 20 engineers, but now has more than 100.

Officials of the company said that the number would be doubled within this year.

Shakhawat Hossain, chief operating officer of Neural Semiconductor, said, "We are currently working on the analogue design, digital design, digital verification, physical and testing design. The company has been working for various companies in the United States, Japan and Malaysia.

"In the initial stage, it was a big challenge to attract engineers to this sector. But now the situation has changed. However, there is still a shortage of high-value commercial software, electronic design automation tools and experts."

Mohammed Jabbar, managing director of DBL Group, said, "The government needs to take special initiatives to develop the semiconductor sector. Our universities need state-of-the-art laboratories along with a modern curriculum."

Walton and ACI are coming

The country's electronics giant Walton started manufacturing computers and laptops in 2018. The company is also producing gaming computers. It started its journey producing mobile phones and home appliances.

Now the company is going to invest in the semiconductor sector soon. It has already secured a location in the Bangabandhu Hi-Tech Park, an official of Walton said.

However, as the company is listed on the stock exchange, its officials did not want to give any official statement in this regard before a formal announcement.

Like Walton, there is also information that ACI, one of the leading industrial groups in the country, is going to invest in the semiconductor sector too. The investment will be under ACI Electronics, a subsidiary of ACI Group.