Semiconductor industry eyes $1b export by 2030, seeks govt backing, policy changes

With ambitions to capture a larger share of the booming global semiconductor market, the Bangladesh Semiconductor Industry Association (BSIA) has set its sights on achieving $1 billion in annual exports by 2030. To make this vision a reality, the association is seeking comprehensive policy support from the government, including substantial fiscal incentives and regulatory reforms.

In a recent letter to Commerce Adviser SK Bashir Uddin, BSIA proposed a 25% cash incentive for semiconductor service exports, stating this would help Bangladesh remain competitive with countries that are heavily investing in their own semiconductor ecosystems. Highlighting how sectors like garments, software, and shipbuilding have long benefited from government subsidies, the association argues similar backing could spur foreign investment and accelerate the development of the country’s chip design and manufacturing capabilities.

BSIA emphasized that without such state support, Bangladesh risks falling behind in a race where global competitors, including Malaysia and Vietnam, are already offering attractive tax breaks, streamlined import processes, and infrastructure support to lure semiconductor giants.

In a separate appeal to the National Board of Revenue (NBR), BSIA called for a 12-year corporate tax holiday and a 10-year VAT exemption for semiconductor companies, especially on design software, tools, and subcontracted services. The group also demanded duty-free imports of essential machines and a minimal duty (0–1%) on critical testing equipment, in line with practices in neighboring countries.

To further ease operations, the association proposed simplified customs procedures, particularly for leased testing machinery that needs to be temporarily imported and re-exported. They urged the government to set up a “green channel” for fast-tracked customs clearance and establish a dedicated semiconductor support cell within the NBR to handle industry-specific issues.

BSIA also suggested classifying semiconductors as a priority sector under Bangladesh’s industrial and revenue policies, and extending fiscal benefits currently offered in Hi-Tech Parks to all semiconductor-related ventures.

“Despite entering the race late, Bangladesh has the potential to leapfrog in this sector,” BSIA President MA Jabbar said. “We have bold entrepreneurs and talented young engineers. Now, what we need are policies that enable their growth.”

Currently, the sector is in its infancy, with companies like UlkaSemi and Neural Semiconductor providing chip design services and generating less than $10 million a year in revenue. BSIA, however, is confident that with the right government backing, this figure can grow exponentially to reach $1 billion within the next five years.