Malaysia can help us enter chip industry

Bangladesh can join hands with Malaysia to develop a sector that caters to global semiconductor industries, which can play a vital role in increasing export earnings, said Shabbir A Khan, president of the Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI).

Malaysia has such a sector, which is drawing a lot of attention but which lacks skilled engineers, for which it has opted for hiring the experts from abroad, he said during an interview with The Daily Star yesterday.

The semiconductor industry is an aggregate of companies engaged in the design and fabrication of semiconductors and semiconductor devices, such as transistors and integrated circuits, he said.

The industry can be divided into three major parts—designing, engineering and packaging, said Khan.

Bangladesh is capable of engaging in designing and engineering while Malaysia is skilled in packaging. If the two countries join hands, both can do better, he said.

On the other hand, a huge number of engineers are graduating from Bangladesh every year. If they can be trained, their skills can be put to good use in the sector, he said.

In 2030, the market size of the semiconductor industry will cross $1 trillion worldwide. So, this sector bears a huge potential for both countries, he added.

As global semiconductor giants are now shifting their manufacturing hubs from Taiwan to Malaysia, it is the best option to target, pointed out Khan, who is also the chief executive officer of Khan & Deen Traders.

Visiting Bangladesh on Friday, Malaysian Prime Minister Anwar Ibrahim had held talks with Prof Muhammad Yunus, chief adviser to the interim government, regarding this sector alongside others, he said.

Recently, a delegation of the BMCCI also held discussions with Malaysia Digital Economy Corporation regarding knowledge and expertise exchange to develop a robust digital economy in Bangladesh, he said.

The BMCCI has taken to promoting the semiconductor sector as it has realised that both countries have the potential to grow through it, he claimed.

Malaysia is a major player in the semiconductor industry, accounting for 13 percent of global testing and packaging. It has attracted multibillion-dollar investments from leading firms in recent years, including Intel and Infineon, said Khan.

Bangladesh is also working on signing a free trade agreement (FTA) with Malaysia to reduce trade barriers, which would increase garment exports and thereby benefit the economy, he said.

At present, Malaysia has an FTA with China, using which the latter exports a high volume of garments to the Southeast Asian country. Once Bangladesh signs its FTA, it will be able to take over the market, he added.

As the world's sixth-largest semiconductor exporter, Malaysia commands a 7 percent share of the global market and accounted for 23 percent of the US semiconductor trade in 2022, said Khan.

However, many Malaysian companies, especially small and medium enterprises, still depend on skilled foreign labour and are hesitant to adopt automation, he said.

Despite this, Malaysia's semiconductor industry has fostered successful local companies specialising in automation solutions, forming a resilient supply chain, he added.

There is a huge shortage of skilled engineers and Malaysia has been currently outsourcing engineers from developed countries, he added.

Once Bangladesh starts focusing on developing the semiconductor sector, it will emerge as a new frontier for high-tech manufacturing, said Khan.

"Our current industry setup is limited to only the integrated circuit design. But if we can enter the semiconductor ecosystem, Bangladesh's foreign exchange earnings from the semiconductor industry may hit the turnover of RMG (readymade garment) sector," he said.

Sectors like garments, pharmaceuticals, leather and leather goods and home textiles are getting special attention through policy support from the government so that they can reach the billion-dollar mark in exports, he said.

If the semiconductor industry gets similar attention, it will indeed surpass the $10 billion-mark by 2031, hoped Khan.

The Malaysian government has proactively addressed the shortage of skilled workers by relaxing conditions regarding foreign labour in the semiconductor, electronics and electrical sectors, he said.

This reflects a recognition of the immediate need for skilled manpower to support industry growth, he said.

Collaboration between Bangladesh and Malaysia offers a promising opportunity to tackle skilled labour challenges in the high-tech industry. By leveraging each other's strengths, both countries can work towards mutually beneficial solutions, he added.