Written By Syed Md. Rakeen, Team MBR

Semiconductor chips constitute a fundamental building block of electronic devices. The utilisation of these technologies has facilitated progress in numerous domains, such as telecommunications, computing, medical care, defence, transportation, sustainable energy, and others. According to the Semiconductors Industry Association, semiconductors are considered the brains of modern electronics, with their developments being the reason behind the shrinking size of electronic devices during the last 50 years. Companies operating in this space are at the heart of technological innovation, geopolitics, human ingenuity, and finance, with their influence reaching almost every corner of the world. The semiconductor industry in Bangladesh is still in its primary stage, with industry insiders estimating that Bangladesh is currently earning up to USD 5 million from the industry in a year, a stark contrast compared to India, which is earning around USD 60 billion annually. Although chips are the main output, many market players in Bangladesh still limit themselves entirely to specific stages of the chip-making process. The reasons behind such trends are pretty obvious: a shortage of capital and capacity, both on the financial and technological fronts.

Global Market Overview

Globally, the industry leaders are Intel, Samsung, TSMC, Qualcomm, Nvidia, and Texas Instruments. The Metropolitan Chamber of Commerce & Industry (MICC) estimates the market size will reach USD 1,033.5 billion by 2031. Taiwan Semiconductor Manufacturing Company, commonly known as TSMC, is the largest chip manufacturer in the world. The company holds the sixth position in market value globally, with a market capitalisation exceeding USD 600 billion. It is a significant supplier of chips to prominent technology companies such as Apple, Intel, and Nvidia. Only TSMC and Samsung possess the technological capacity to manufacture the latest and most sophisticated 5-nanometer chips in contemporary iPhones. The company based in Taiwan is reportedly poised to commence production of its 3-nanometer chips in 2022, thereby providing the most cutting-edge foundry technology.

History of Semiconductors

The emergence of semiconductors can be traced back to the invention of the rectifier (AC-DC converter) in 1874. In 1947, Bardeen and Brattain, two researchers at Bell Laboratories in the United States, successfully developed the point-contact transistor. Following this breakthrough, in 1948, Shockley, another researcher, created the junction transistor. The aforementioned event marked the commencement of the era of transistors. In 1946, the University of Pennsylvania successfully built a computer using vacuum tubes. However, the vacuum tubes occupied an entire room and produced substantial heat and power due to their considerable size. Subsequently, the initial transistorbased calculator, which served as a rudimentary computer, was developed, leading to significant advancements in computer technology.

Following the invention of the transistor, the semiconductor industry experienced rapid expansion. Due to its compact size and low weight, the Integrated Circuit (IC) has found extensive usage across various electrical devices. In 1959, Kilby of Texas Instruments and Noyce of Fairchild Semiconductor developed bipolar integrated circuits in the United States. The aforementioned finding marked the beginning of the era of integrated circuits and significantly impacted the history of semiconductors. The large-scale integrated circuit development resulted from the continued advancement of integrated circuit integration. During the 1980s, there was a significant advancement in the field of microelectronics with the introduction of Very Large Scale Integration (VLSI) technology, which enabled the integration of electronic components ranging from 100,000 to 10,000,000 on a single chip. Subsequently, in the 1990s, the field witnessed the emergence of Ultra Large Scale Integration (ULSI) technology, which facilitated the integration of more than 10,000,000 electronic components on a single chip.

Manufacturing Process of Semiconductors

Semiconductor companies specialise in the production or fabrication of chips. Fabless semiconductor companies, which refer to organisations that design and supply chips without owning fabrication facilities, typically rely on outsourcing their chip manufacturing operations to foundries (which produce semiconductor products on behalf of other semiconductor companies), predominantly located in Asia.

The production of integrated circuits entails a multifaceted procedure encompassing several stages. Initially, a thin and lustrous silicon wafer is fabricated and refined to attain a reflective surface. Subsequently, a silicon dioxide coating is deposited onto the wafer’s surface to safeguard against potential chemical contaminants. Later, the computer-aided design software is utilised to generate the circuit design, which is then transposed onto a glass substrate through photomasks. During the etching process, excessive portions of the wafer surface are eliminated until the intended circuit patterns remain. The method of depositing thin films onto the surface of a wafer is followed by the creation of metal circuits that connect the electronic elements. Upon completion of the manufacturing process, the chips undergo a series of evaluations, which include electrical die sorting, to verify that they conform to the specifications set by the manufacturer. Subsequently, the operational microchips are sectioned and affixed to a lead frame or printed circuit board, followed by a moulding procedure to produce an outer casing. Later, the chips undergo secondary testing to verify their proper functionality.

Nascent Stage of the Semiconductor Industry in Bangladesh

Bangladesh has set a goal to increase the valuation of its IT sector from the current USD 1 billion to USD 5 billion by 2025. The potential for the semiconductor industry to serve as an economic catalyst for Bangladesh’s entry into the 4th Industrial Revolution is worth exploring. The Hi-Tech Park Authority is investigating the possibility of sending local engineers abroad for advanced study and hands-on training in semiconductor-related sectors. The Bangladesh HiTech Park Authority has been working to develop the semiconductor sector by offering tax breaks and other financial advantages to businesses that manufacture semiconductors. The government has also granted tax holidays to firms that produce semiconductors and exemptions from import taxes on the machinery and raw materials used in the manufacturing process. High-skilled workers with backgrounds in electrical engineering, physics, material science, and computer science engineering are needed in the semiconductor businesses. Engineers may be offered necessary benefits in exchange for staying in their native countries and working for themselves in this sector. Bangladesh provides considerable market potential for the semiconductor sector due to the country’s high demand for electronic devices, including smartphones, tablets, desktops, and laptops.

Some companies, such as Ulkasemi and Neural Semiconductor, have already blazed a trail in the industry. Even though chips are the primary product, several players still only participate in certain phases of the chip-making process.

Ulkasemi Private Limited

Ulkasemi, a company founded in 2007, maintains offices in India, Bangladesh, Canada, and the United States. Ulkasemi has been identified as the leading provider of semiconductor design services in Bangladesh. In 2021, TMSC, a leading semiconductor company, established a partnership with Ulkasemi in its design centre partnership programme. The TMSC design centre alliance comprises a select group of 20 businesses globally. Furthermore, Ulkasemi has disclosed a USD 25 million investment in Bangabandhu Hi-Tech Park to provide semiconductor design services.

Neural Semiconductor Limited

Neural Semiconductor Limited, one of Bangladesh’s most rapidly expanding semiconductor firms, is a sister company of DBL Group, one of the nation’s top readymade garment exporters. It has extended its VLSI design and software services to some international semiconductor manufacturing businesses. Analoguemixed signal design, digital verification, physical design, design for testability, and process automation are among the firm’s services. They work for organisations that are among the top five chip manufacturers in the world.

PrimeSilicon Technology Inc.

PrimeSilicon is a firm that specialises in rendering design services for Application-Specific Integrated Circuits (ASIC). The organisation has a proven history of showcasing proficiency in this area. PrimeSilicon, founded in 2007 in San Jose, California, has provided ASIC design implementation services and solution consultation to multiple Silicon Valleybased companies across diverse technology nodes. In 2013, PrimeSilicon embarked on establishing its largest offshore design centre in Dhaka, Bangladesh. The research team specialises in FinFET technology and has acquired significant expertise in the design of chips with a minimum feature size of 7-nanometer. The individual’s commitment to their professional responsibilities is commendable, having effectively provided outstanding chip design solutions and having accomplished more than 30 tape-outs.

Complexities of the Chip-Making Business

Cracking the code of the chip-making business involves a complex procedure, hundreds of technologies, highprecision equipment, and a close network between all parties. Electronic Design Automation (EDA) software is the first step, followed by the actual design, production, packaging, and testing. Extremely precise machinery, clean chemicals, and subatomic handling are required for the manufacturing process. This procedure involves thousands of patents, intellectual property rights, tools, and complex teamwork.

Bangladesh should plan to reduce its reliance on readymade garments in the export basket as it prepares to graduate from LDC status and lose access to favourable tariffs in its export markets. Investigating the semiconductor sector might be the first step towards Bangladesh’s much-needed diversification. The size of the semiconductor market is anticipated to skyrocket gradually in the coming years. The aforementioned factor makes this industry appealing to foreign investors.

Bangladesh would need to produce more VLSI experts and keep them in continuous training. It would be beneficial if Bangladesh could initially focus on design, servicing, packaging, and testing, as the other processes, especially fabrication, require a high upfront investment.

The Battle for Chip Supremacy

Manufacturing semiconductors is an exceedingly challenging, high-stakes industry that has historically seen enormous corporate competition. The contest now includes governments as well. These vital technological components, sometimes called integrated circuits or, more generally, just chips, are some of the most miniature but precise items ever created. There is a global reliance on a small number of firms since they are so expensive and difficult to produce. Chip availability has also evolved into a geopolitical weapon as the United States tightens restrictions on shipments to China to quell the growth of a business rival. The CHIPS Act, recently implemented in the United States, reflects a growing concern regarding the domestic production of semiconductors. The Act aims to promote semiconductor fabrication within the country’s borders.

Currently, TSMC and Samsung are the only fabs capable of manufacturing the most advanced 5-nanometer chips. Both are preparing for 3-nanometer chips that may go into production at any time.

As the demand for semiconductors continues to rise worldwide, it is imperative for countries to strategically explore new industries and seize market opportunities to secure a share of the market. The attainment of success in this particular industry significantly depends on political foresight and direction. Bangladesh must increase the number of experts in VLSI and ensure their ongoing training. The current state of VLSI expertise in Bangladesh is limited due to insufficient knowledge and practical experience. It is suggested that Bangladesh prioritise the design, servicing, packaging, and testing processes, particularly in the initial stages. The prioritisation of industry-academia collaborations is recommended to streamline academic curricula and expedite the development of VLSI specialists. Establishing post-graduation training programmes as a fundamental component for individuals within this particular industry is imperative. It is recommended that Bangladeshi experts hailing from the Silicon Valley of the United States be engaged in the advancement and expansion of the industry. According to recent research, the potential for Bangladesh to become a leading economy in the future could be significantly enhanced through investments in semiconductors.