Bangladesh Bets on Chips: PM Taps Semiconductor Sector as Next Economic Engine
Dhaka unveils tax breaks, startup grants and park modernization to capture share of $1 trillion global market.
From Garments to Chips
Prime Minister Tarique Rahman has designated the semiconductor industry as Bangladesh's next major economic growth engine, pivoting away from the country's decades-long dependence on readymade garments (RMG). Speaking at the National Semiconductor Symposium and BEAR Summit 2026 in Dhaka on July 25-26, Rahman announced a comprehensive government plan to build a technology-driven economy capable of competing in the global chip market.
"The semiconductor industry could emerge as Bangladesh's next promising economic sector after the RMG industry," the Prime Minister said, outlining ambitions to achieve targeted export earnings from the sector by 2030.
Tax Breaks and Startup Capital
The government has withdrawn all taxes and duties on raw materials required for semiconductor manufacturing in the current fiscal budget (FY2026-27), removing a significant cost barrier for new entrants. An annual startup grant has also been allocated to support innovation, though sources differ on the amount: The Daily Star and Daily Sun report Tk 5 crore, while Jagonews24 and UNB cite Tk 500 crore for the current budget.
Infrastructure development forms another pillar of the strategy. Dhaka plans to establish a new biotech park and modernize existing high-tech parks to attract domestic and foreign investment. The initiative is backed by the Bangladesh Semiconductor Industry Association (BSIA), the Ministry of Science and Technology, and the Silicon River Bangladesh program.
Chasing a Trillion-Dollar Market
The timing reflects both necessity and opportunity. Bangladesh's economy has long been dominated by RMG exports, leaving it vulnerable to sector-specific shocks. As the country seeks to diversify and transition toward the Fourth and Fifth Industrial Revolutions, the government is targeting deep-tech sectors that underpin AI, robotics, and renewable energy.
The global semiconductor market is projected to reach approximately $1 trillion by 2026, according to SIA and WSTS forecasts cited at the summit, with some estimates reaching $1.5 trillion for 2026 and exceeding $1.9 trillion in 2027. Capturing even a small fraction of this market would represent a transformative shift for Bangladesh's export profile.
The Road to 2030
Success depends on leveraging Bangladesh's youth population and expatriate experts to move from a labor-intensive economy to a knowledge-based one. The semiconductor push aims to position the country within the global high-tech supply chain, reducing reliance on a single export industry while building critical infrastructure for emerging technologies.
Dhaka faces an ambitious transition by 2030. With tax incentives, startup capital, and park modernization now in motion, Bangladesh has staked its claim in the race for chip sovereignty.