Can Bangladesh convert the global silicon rush into a national opportunity?
As the global semiconductor market expands, Bangladesh is emerging as a potential player in chip design and assembly. But turning that promise into a competitive industry will require targeted policy support, shared infrastructure and stronger industry coordination
The global semiconductor market surpassed $630 billion in 2024 and is projected to reach $1 trillion by 2030, driven largely by demand for artificial intelligence (AI), electric vehicles, 5G and automation.
At the same time, the US-China technology rivalry has transformed semiconductor supply chains into a strategic concern.
The US CHIPS Act allocated $52.7 billion to rebuild domestic manufacturing, while China has invested heavily to strengthen self-sufficiency. Beijing's export restrictions on gallium and germanium have further highlighted the fragility of global supply chains.
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As a result, countries and companies are increasingly seeking alternatives beyond the traditional US-China-Taiwan semiconductor triangle.
Japan has pledged more than 10 trillion yen through 2030 to strengthen chip production and AI development. South Korea is expanding semiconductor operations in Vietnam and Malaysia while exploring South Asia for design partnerships. The European Union, meanwhile, has mobilised €43 billion through its Chips Act to reduce supply dependence.
This broader diversification push creates an opportunity for countries like Bangladesh to position themselves as cost-effective and politically neutral partners.
Bangladesh's starting point
Bangladesh's semiconductor sector remains small but no longer negligible.
The industry currently consists of around 13 companies employing approximately 700 chip designers. Export earnings increased from $6 million to $8 million between 2022 and 2024.
The country also has a growing academic pipeline. Around 30 universities now offer VLSI-related programmes, producing more than 20,000 graduates annually in computer science and electrical engineering.
Recognising the opportunity, BIDA formed a semiconductor taskforce in January 2025 to develop a roadmap targeting $1 billion in exports by 2030.
Bangladesh also enjoys a cost advantage. Operating expenses in Dhaka are estimated to be 16–20% lower than Bangalore and roughly 30% lower than Cebu, two major semiconductor service hubs in Asia.
But cost competitiveness alone will not build a globally credible semiconductor industry.
From LDC anxiety to opportunity
Bangladesh's semiconductor ambitions come at a time of broader economic uncertainty.
In February 2026, the government formally requested a postponement of Bangladesh's graduation from Least Developed Country (LDC) status, citing macroeconomic pressures and concerns over losing trade benefits that have long supported the garment sector.
The semiconductor industry, however, offers a different growth model.
Unlike garments, semiconductor design services do not depend heavily on preferential trade access. The sector competes primarily on talent, technical capability and cost efficiency.
Building semiconductor capacity could therefore strengthen Bangladesh's economic resilience in a post-LDC environment.
Unlike garments, semiconductor design services do not depend heavily on preferential trade access. The sector competes primarily on talent, technical capability and cost efficiency. Building semiconductor capacity could therefore strengthen Bangladesh's economic resilience in a post-LDC environment.
A realistic roadmap
Bangladesh is not yet in a position to pursue semiconductor fabrication — the highly capital-intensive process of manufacturing chips. Fabrication requires billions of dollars in investment, ultra-stable electricity and sophisticated clean-room infrastructure.
A more realistic near-term focus is fabless chip design, where companies design chips that are then manufactured abroad in countries such as Taiwan, South Korea or Japan.
One of the biggest barriers remains access to Electronic Design Automation (EDA) tools, which often cost hundreds of thousands of dollars in licensing fees.
A government-backed national licensing arrangement, similar to India's model, could significantly lower barriers for universities and startups.
Bangladesh could also realistically enter the Outsourced Semiconductor Assembly and Testing (OSAT) segment, which requires lower investment than fabrication while generating large-scale employment.
Existing hi-tech parks could be upgraded into certified clean-room facilities with dedicated power infrastructure to attract mid-tier global firms seeking diversified supply chains.
The opportunity is substantial. Southeast Asia's semiconductor market is projected to grow from $23.9 billion in 2024 to more than $55 billion by 2033.
Building an ecosystem
The local industry also needs stronger coordination.
Bangladesh's semiconductor firms currently operate in a fragmented manner. A more collaborative ecosystem, similar to Malaysia's early semiconductor model, could help firms share infrastructure and maintain collective industry standards.
Such cooperation would not require compromising client confidentiality. Instead, collaboration could focus on shared testing facilities, verification labs and access to professional-grade EDA software.
A coordinated international presence could also help Bangladesh project greater industry depth to foreign clients and investors.
The role of the state
Government support will be critical.
Short-term extensions of the existing 6% cash incentive for IT services may not be sufficient for the semiconductor sector's long-term development. Industry stakeholders have argued for more durable policy commitments and stronger financial incentives to remain regionally competitive.
Beyond subsidies, Bangladesh will need updated university curricula focused on VLSI and chip design, faster visa processes for diaspora professionals and foreign experts, and stronger intellectual property protections to build international confidence.
The Bangladeshi diaspora could also play a major role. Professionals working at companies such as Intel, Qualcomm and Nvidia could provide mentorship, investment access and industry connections that financial incentives alone cannot offer.
Bangladesh's semiconductor industry remains at an early stage. But global supply chain shifts, geopolitical fragmentation and rising demand for chip design services are creating an opportunity that did not exist a decade ago.
Whether Bangladesh can seize it will depend less on ambition alone and more on its ability to build institutions, infrastructure and long-term policy certainty.
Dr. Sabbir Ahmad, an engineering and corporate leader with extensive global experience in digital connectivity, energy infrastructure, and sustainable development. He can be reached at sabbir@ieee.org.
Disclaimer: The views expressed in this article are the author's own and do not necessarily reflect the position of The Business Standard.
