Bangladesh steps up in global chip race

After more than a decade of steady growth, Bangladesh’s semiconductor sector is preparing for what industry leaders describe as its biggest push yet, backed by coordinated government policy, tax incentives and renewed efforts to expand globally.

What began with a handful of chip designers has grown into an ecosystem of local companies serving clients in the United States, Japan, Taiwan and other countries.

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Although still small, the sector is entering a new phase as policy support, international partnerships and talent development begin to converge, industry leaders say.

The government has announced a series of tax incentives for semiconductor and chip-related activities in the FY2026-27 budget, exempting regulatory duty, supplementary duty, VAT and advance tax on raw materials used in chip design, testing and packaging until June 30, 2031, while retaining a 1 percent import duty.

The incentives follow months of policy work and international roadshows led by the Bangladesh Semiconductor Industry Association (BSIA), which says global technology companies are increasingly viewing Bangladesh as a potential destination for semiconductor design and engineering services.

“The combination of fiscal incentives, policy support and growing engineering capacity could position Bangladesh to capture a larger share of the rapidly expanding global semiconductor market,” MA Jabbar, president of BSIA, told The Daily Star.

The momentum is expected to accelerate this week with the National Semiconductor Symposium & BEAR Summit 2026 at Novo Theatre, Dhaka, on July 25-26. The event will bring together government leaders, global semiconductor executives, researchers, investors, universities and members of the Bangladeshi diaspora.

Organised by the BSIA, in partnership with the Ministry of Science and Technology and the Silicon River Bangladesh programme, the summit will be inaugurated by Prime Minister Tarique Rahman.

It is expected to unveil eight strategic documents, including a national semiconductor talent roadmap, ecosystem roadmap and international partnership framework, to guide Bangladesh’s long-term semiconductor ambitions.

Roadshows in Malaysia, South Korea and the United States have also attracted global semiconductor companies interested in collaborating with local firms.

INSIDE BANGLADESH’S CHIP INDUSTRY

After graduating from Buet in 1977 and later working as a chip designer at AMD in the United States, Mohammed Enayetur Rahman returned to Bangladesh and founded Ulkasemi in Dhaka in 2007 with just four engineers.

Since then, Ulkasemi has grown into one of the country’s leading semiconductor firms. It became a Design Center Alliance partner of TSMC in 2021 and now operates design centres in four countries, employing more than 600 engineers with a senior management team that brings over 250 years of combined Silicon Valley experience.

The wider industry has also expanded. According to BSIA, around 1,200 engineers now work in semiconductor-related activities across companies including Ulkasemi, Neural Semiconductor, iTest Bangladesh, sBIT Inc, Mars Solutions, Prime Silicon, Siliconova, and others. Annual industry revenue is estimated at $12 million-$15 million, still modest by global standards but significantly higher than a few years ago.

The industry’s immediate focus is not advanced chip manufacturing.

“Manufacturing (foundries/fabs) is currently beyond our reach in Bangladesh,” said Munir Ahmed, founder of iTest Bangladesh Limited. “Our core focus for the country will be design, testing and assembly.”

Founded around 2021 with a small training-oriented team, iTest now employs 33 people and expects its workforce to exceed 50 by the end of this year while serving mainly American and Taiwanese clients.

Neural Semiconductor, launched by DBL Group in 2017, has grown from 20 engineers to more than 200 and plans to double its engineering workforce again.

“We primarily focus on physical design, analogue design, layout and RF design,” MA Jabbar, also managing director at Neural Semiconductor Limited.

Another early entrant, sBIT Inc, established in Silicon Valley in 2007 and in Bangladesh in 2010, works with international clients including Broadcom and AMD while providing chip design tools and training support to universities.

“We are two pioneer companies in Bangladesh: sBIT and Ulkasemi,” said Jahangir Dewan, CEO of sBIT.

Prof Muhammad Mustafa Hussain, a professor of electrical and computer engineering at Predue University, said several initiatives are under way, including a Semiconductor Training, Advances and Research (STAR) facility at BUET, efforts to revive cleanroom infrastructure at the Bangladesh Atomic Energy Commission and expanded research collaboration programmes.

Around 3,500 people are expected to receive training through current initiatives, while BSIA has set long-term targets of 10,000 skilled professionals and more than $1 billion in revenue by 2030.

Bangladesh’s push comes as semiconductors become increasingly strategic, powering artificial intelligence, data centres, electric vehicles, defence equipment and smartphones.

Industry leaders say the country’s neutral geopolitical position could work in its favour.

“Bangladesh is a neutral country. Neither side views us as a rival,” said Prof Hussain, referring to the ongoing US-China technology competition.

Bangladesh currently accounts for only about 0.01 percent of the global semiconductor market. Prof Hussain said the initial target was to raise that share to 0.1 percent before eventually reaching 1 percent.

“If you could capture 1 percent of the global market by 2035, it would be more than $100 billion-dollar earnings for Bangladesh,” he added.

INDUSTRY SEEKS POLICY BACKING

Despite recent policy initiatives, industry leaders say Bangladesh will need stronger long-term support to become a competitive player in the global semiconductor industry.

Ulkasemi’s Enayetur Rahman called for a dedicated semiconductor fund offering low-interest loans and grants, a 20-year tax holiday, a 25 percent export incentive for semiconductor design, testing and packaging services, and cash incentives for exports.

He also urged the government to revise customs rules for all import methods, simplify visa procedures, provide tax benefits for foreign experts, establish a public-private deep-tech investment fund, develop dedicated infrastructure in Hi-Tech Parks, and ensure political stability and a genuine one-stop approval system for investors.