On January 1st, the government officially approved the formation of a national task force focused on the semiconductor sector. The announcement marked an ambitious departure for a country better known for garments than microchips. Led by the Bangladesh Investment Development Authority (BIDA), the 13-member group aims to position Bangladesh as a player in the global semiconductor value chain. The task force's mandate includes identifying immediate growth opportunities, addressing policy and skills gaps, and recommending infrastructure and incentive frameworks to attract global investment.
The initiative is important for Bangladesh and the timing couldn’t have been any better. As semiconductor companies seek to diversify their supply chains away from traditional hubs, Bangladesh's strategic location near existing Asian manufacturing clusters could prove advantageous. The country's competitive labor costs and young workforce—selling points that helped it build the world's second-largest garment industry—are being used as assets and potential competitive advantage.
Over the last decade, Bangladesh has built a small but growing semiconductor footprint, led by companies like Ulkasemi, Neural Semiconductor Limited, and PrimeSilicon Technology (BD) Ltd.
Yet semiconductor is a complex and highly competitive industry. The industry demands billions in upfront investment, pristine manufacturing environments, and specialized technical expertise that takes years to develop. For Bangladesh, transforming from a textile powerhouse to a chip manufacturer will require more than just governmental enthusiasm.
In the past, the Bangladesh government spent lavishly to build its ICT sector without really thinking it through or creating a national industrial policy and strategy for ICT. Those expenses have now proven to be a colossal waste without much long-term impact. The ICT sector continues to struggle to grow, and the country's nascent startup scene is on the brink of collapse.
To that end, the semiconductor taskforce's end-of-January deadline for "actionable results" seems optimistically brief given the complexity of the undertaking. More realistic would be a methodical approach focused on building fundamental capabilities—strengthening technical education, developing reliable power infrastructure, and creating investment-friendly policies for the sector. Even more important would be to study the innovation clusters of the semiconductor industry across the world and to design an industrial policy for the sector while taking a long-term view of the challenge.
When it comes to ambitious goals, making noise is relatively easy, and you can do it for a while with some success. But real impact will require real work. And Bangladesh would do better to focus on finding its niche in the less capital-intensive segments of the semiconductor value chain. Testing, packaging, and design services could offer more accessible entry points than front-end manufacturing.
The government's semiconductor ambitions are admirable, but success will require patience, a long-term orientation, pragmatism, and a clear-eyed understanding of the industry's formidable barriers to entry.
Bangladesh's policy establishment often operates on whims and assumptions. Policies and decisions are made with little empirical basis. In the past, this approach hasn't brought any good for the country. It would be wise if the taskforce remain conscious of these tendencies in our policymaking establishment and remember that in the chip business, a more thoughtful and patient approach based on empirical evidence may be the surest path to success.
