Semiconductor industry

The semiconductor industry in the world indicates that its business will create a great influence on international trade and global power structure. On August 9, 2022, US President Joe Biden enacted the "CHIPS and Science Act" that seeks to strengthen the U.S. semiconductor supply chain, encourage investments in semiconductor manufacturing facilities in the United States and stimulate semiconductor research and development (R&D). Among other things, the legislation provided $52.7 billion in federal outlays over five years for loans, loan guarantees, grants, and other financial support for domestic chip-making investments, as well as a 25 per cent tax credit for semiconductor investments in the United States. The United States has some excellent community colleges offering curricula and training programmes designed to give graduates the skills necessary to build careers in semiconductor manufacturing. The Semiconductor Industry Association (SIA) is the voice of the semiconductor industry, one of America's top export industries associations and a key to America's economic strength, national security, and global competitiveness. The Semiconductor Industry Association (SIA) reports that worldwide sales of semiconductors of the USA were $48.8 billion in October 2021, an increase of 24.0 per cent from October 2020.
The world is transforming into the 4th Industrial Revolution very fast, if any country does not wish to go with it, it will stay behind in this industrial transformation. Now the semiconductor business is considered by many nations as the number-one cross-border business in global markets. The IOT, AI, Blockchain, Big Data are being taught or used at educational institutions, business firms, industry level, public offices, hospitals and at family levels in many countries. The number of smart phone users is growing rapidly and it has created new demand for chips. It has become a billion-dollar business in South Korea, Singapore, Malaysia, Hong Kong, Taiwan, India and advanced countries like USA, UK, Japan, China, Germany, etc. We know that Bangladesh has traditionally been focused on textiles, agriculture, shrimp, leather goods and some other few products but potentials of the semiconductor industry is still untapped. Bangladesh is home to 160 million people and the domestic demand for electronics has created opportunities for semiconductor companies to produce more chips for meeting the fresh demand.
Taiwan, Singapore, and South Korea had paid attention to the semiconductor industry during early 90s to meet the demand of Asian countries. But in recent past their salaries of engineers in the semiconductor industries went higher than any other Asian country. So Bangladesh has a comparative advantage in the semiconductor industry. We have a lot of fresh CSE graduates, engineers who can be engaged in this sector to develop the semiconductor industry in Bangladesh, if they find a congenial atmosphere.
Though it is considered as a capital-intensive industry but actually this industry needs a lot of human capital to meet a diverse array of specialized skills such as materials science engineers, computer science engineers, electrical engineers, software experts and other skilled persons for this industry. Semiconductor manufacturing needs continuous research and study as well.
Bangladesh has a lack of significant investment in the hardware industry until now. Semiconductors are the heart of electronics which are made of silicon or germaniumare, the essential chips for computers, smartphones, automobiles, or any other medical equipment. The domestic demand for laptops, computers, and smartphones are growing over the period and the chips of Samsung, Nokia, Vivo, Google pixel are gaining popularity in Bangladesh. India earns 60 billion USD annually from the market but Bangladesh's earnings are very low in this sector. A good number of students are graduating from CSE departments of universities in Bangladesh each year which is a good sign for development of the semiconductor industry.
Supporting tech industries can accelerate the transition from a developing country to a developed nation faster. The semiconductor industry can be the next economic stimulator for the 4th Industrial Revolution in Bangladesh.
To become Smart Bangladesh, the country needs to establish the framework and facilities of a high-technology manufacturing semiconductor industry. Though Bangladesh has already taken steps such as tax breaks for semiconductor manufacturers and the establishment of dedicated hi-tech parks to attract foreign direct investment, the desired investment still is far away.
As we know that the semiconductor industry is highly specialised, and it requires a skilled group of CSE engineers to support this industry but engineers do not like to stay in the country, rather they are going abroad to work for better opportunities. Attracting these young graduates to the newly-established high-tech parks needs huge infrastructure and facilities. The government has recognised the importance of the semiconductor industry for economic growth and has been taking steps to encourage its development. But more interventions are needed such as private businesses and the Hi-tech Park Authority may jointly explore potentials of sending local engineers abroad for higher study and intensive training in the fields relating to semiconductors.
Bangladesh Hi-Tech Park Authority has been trying to establish a semiconductor industry with tax incentives and other financial benefits to companies involved in semiconductor manufacturing. Tax holiday for companies involved in the production of semiconductors, as well as exemptions from import duties on raw materials and machinery used in the production process have also been given by the government. The semiconductor industry requires highly-skilled professionals with expertise in areas such as electrical engineering, physics, and material science and computer science engineering. Necessary benefit packages can be provided to engineers, for which they can be attracted to remain in home country and self-employed in this industry. Bangladesh has huge demand for electronic devices such as smartphones, tablets, desktops and laptops which has created a significant market opportunity for the semiconductor industry.We have well-established garment industries, which could provide opportunities for semiconductor companies to leverage existing supply chains and distribution networks. In the days of 4th industrial revolution, can we grow without facilitating semiconductor industries which can be considered a driver for meeting domestic demand to save foreign currency as well as exporting chips for earning foreign currency?
By 2026, Bangladesh is going to be recognised as a developing country and this graduation from the least developed country (LDC) status needs a robust expansion of the IT sector base and at the same time the development of semiconductor industries. The semiconductor industry can be the next economic stimulator that Bangladesh needs to enter into the 4th Industrial Revolution. Bangladesh has displayed tremendous potential as a growing economy in Asia. However, there is a reason why it is called one of the rising tigers of Asia. The engineers can help promote the semiconductor industry at a faster pace to make Bangladesh a Smart Bangladesh as envisaged by our present government. Robust investment in the semiconductor industry is the need of the hour which can transform Bangladesh into a developed and prosperous country by 2041.

Dr. Md. Shamsul Arefin is Adjunct Faculty at Bangladesh Institute of Governance and Management