Pakistan to develop chip manufacturing sector with help of China

ISLAMABAD           -          Pakistan and China have joined hands to build a semiconductor zone in the country to promote the chip manufacturing sector, WealthPK reported. The semiconductor industry is considered to be at a nascent stage in Pakistan. However, according to a report of the Ministry of Information Technology and Telecommunication (MOITT), a semiconductor zone will be set up in Pakistan with the help of China. The report says that since Pakistan imports most of the semiconductor chips used in local manufacturing, the global shortage due to the pandemic has affected the country. The initiative was pushed forward seeing how other countries are leaps and bounds ahead of Pakistan in the semiconductor industry. RapidSilicon, a San-Jose and Shanghai headquartered company, announced in 2021 that it wanted to become the first chip design firm in Pakistan. After acquiring $15 million in seed funding, the company opened up a local office and began operations by hiring more than 60 engineers in Lahore. Steps are underway to push this sector to the fore. Funding amounting to Rs41.75 million was approved by the provincial government for establishing chip design centres in eight universities in Punjab. According to Hamza Saeed, the director of strategic planning and client services, Chinese companies have shown immense interest in the projects of the Special Technology Zones Authority (STZA). Recently, China has announced a $400 billion plan to reach the semiconductor demand. China needs 0.5 million chip developers while 0.2 million chip designers have been arranged by China internally. China is looking for 0.3 million chip designers from other countries. “STZA is also engaged with China to provide chip designing services. This strategic cooperation is being negotiated at the agreement level,” said Hamza Saeed. He said that authority STZA devised a multi-pronged strategy in consultation with Chinese stakeholders. The Foreign Office of Pakistan has a special section for Chinese affairs while the STZA has introduced a comprehensive strategy with the Pakistani embassy in China about outreach to Chinese businesses. Pakistan embassy issued 200 letters to different Chinese tech companies. According to the ministry’s report, China has positioned itself as a hub for manufacturing and supplying hardware components which makes the supply of such products in abundance and at affordable prices. The volume of the global semiconductor chip industry is expected to reach about $600 billion in 2022 with 80% of the products coming from a handful of manufacturers in selected countries. The past two years have seen a critical chip shortage, which has resulted in a loss of more than $500 billion. The chip industry is looking to increase its overall output on a global scale so that the supply and demand disparity does not get as dire as it did in 2020. The governments have already committed billions of dollars to increase output with some 50% higher outputs expected from traditional manufacturing clusters in places like China’s Taiwan region and Korea.

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