Pakistan: The Next Electronics Manufacturing Hub?

Soaring demand for consumer electronics and low labor costs are attracting major global smartphone manufacturers like Samsung to Pakistan. In 2021, local manufacturers produced 25 million handsets, up a whopping 88% increase from 13 million produced in 2020. A key factor credited for this rapid production ramp-up is the new Mobile Device Manufacturing Policy announced and implemented by former Prime Minister Imran Khan's government in 2020. It imposes high tariffs on the import of mobile phone sets and offers tax rebates for local manufacturing. The policy set a 49% localization target by June 2023, including 10% localization of components on the motherboard and 10% localization of batteries.  Pakistan is forecast to be the world's 7th largest consumer market by 2030. The key to attracting more manufacturing in Pakistan lies in continuation of pro-investment policies and a measure of political stability. 

Pakistan Going From Imports to Exports of Mobile Handsets. Source: PIDE

The local manufacturing plants have assembled 14.08 million mobile phone handsets in the first six months (January-June) of 2022, while imports declined to 1.14 million handsets, according to the Pakistan Telecommunication Authority (PTA). Implementation of Device Identification Registration and Blocking System (DIRBS) and conducive government policies including the Mobile Device Manufacturing Policy 2020 have created a favorable environment for mobile device manufacturing in Pakistan.

Pakistan Mobile Phone Market. Source: PIDE

In addition to Samsung, a number of Chinese mobile handset manufacturers are investing in Pakistan to ramp up local production. Itel has manufactured 3.91 million mobile devices followed by VGO Tel's 2.97 million, Infinix 2.65 million, Vivo 2.45 million, Techno 1.87 million, QQMEE 0.86 million and Oppo 0.67 million. After the export of the first lot of 4G smartphones to the UAE in 2022, Pakistan has now set $1 billion target for mobile phone exports for the current fiscal year. 

Pakistan Telecom Indicators. Source: PTA

Pakistan wants to emulate Vietnam which has emerged as one of the leading countries in the assembly and export of smartphones and other consumer electronics devices in the past decade. Apple has recently moved part of its iPad manufacturing to Vietnam from China, where Covid lockdowns have disrupted supply chains.  TRT World has recently quoted Quentin D’Silva, the head of Lucky's smartphone division in Pakistan, as saying, “It’s only in the last five to seven years that the smartphone business has mushroomed in developing countries like ours". 

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  • Riaz Haq

    Amir Husain
    @amirhusain_tx
    MANUFACTURING IN PAKISTAN: THE CELL PHONE EXAMPLE

    The industry created 60,000 direct jobs per Profit Magazine. The Pakistan Mobile Phone Manufacturers Association puts total employment (direct + indirect) at 40,000+ jobs in 2024, but this undercounts distribution, retail, and service networks. Eight dedicated training centers have been established, graduating 5,000+ technical staff annually. Twelve thousand workers have been trained in advanced manufacturing processes.

    Major brands assembling in Pakistan: Samsung, Xiaomi, Vivo, Oppo, Realme, Infinix, Tecno, Itel, Nokia, and more than a dozen local brands.
    The industry reduced Pakistan's mobile phone import bill by $1.2 billion in 2024, a 35% decrease from the previous year, while contributing PKR 15 billion in tax revenue.

    The government's Mobile Device Manufacturing Policy explicitly outlines a localization roadmap. Current focus areas:

    Chargers (already localized)
    Batteries (in progress)
    Cables and accessories (in progress)
    Packaging (fully localized)
    Plastic casings and parts (in progress)

    Next phases target PCB assembly, display modules, and eventually higher-level component manufacturing.

    Here's another thing nitpickers miss entirely: the capabilities for higher-value manufacturing exist in Pakistan. They're just deployed in different sectors. For example, Karachi-based firm Ronin (which I've covered in my Made in Pakistan thread series) has established Pakistan's first smart wearables and tech accessories manufacturing and assembly industry. They're producing earbuds, smartwatches, headphones, neckbands, and power banks domestically, including acoustic design and plastics manufacturing. Not importing finished goods. Manufacturing them.

    The National Institute of Electronics (NIE) operates SMT production lines with component placement capability of 30,000 components per hour, the same surface mount technology used globally for electronics assembly.
    PCB design and stuffing: Multiple Pakistani firms offer PCB layout, SMD placement, and electronics assembly services to international clients.
    And at the frontier there is RISC-V chip design.

    In 2022, undergraduate researchers at MERL (Micro Electronics Research Lab) at UIT Karachi designed and taped out Pakistan's first RISC-V based System-on-Chip. The President of Pakistan inaugurated the chips, "Ghazi" and "Ibtida," fabricated on 130nm SkyWater process design kit through Google's free tapeout program.

    Since then, MERL students have completed 9 tapeouts. All designed by undergraduate students.

    Aql Tech Solutions in Islamabad is a RISC-V processor IP company that grew from 5 engineers to 40+ in under two years. They're developing RISC-V-based processors from high-end 64-bit cores to microcontrollers, working with Silicon Valley startups.

    IEEE Spectrum noted in 2021 that Pakistan, alongside India, has "embraced RISC-V as their national instruction set architecture for homegrown chip development."

    Let me be clear: Pakistan has active teams doing chip design work. Not chip fabrication, as no one except TSMC, Samsung, increasingly SMIC and Huawei, and Intel can do leading-edge fab. But chip design, which is where much of the intellectual value resides. This is Level 5 capability. It DOES exist in Pakistan.


    https://x.com/amirhusain_tx/status/2016694941993590808?s=20

  • Riaz Haq

    Amir Husain
    @amirhusain_tx
    MANUFACTURING IN PAKISTAN: THE CELL PHONE EXAMPLE

    The question is not whether Pakistan CAN do these things. Pakistan demonstrably can. The question is whether the ecosystem matures fast enough to integrate these capabilities into commercial manufacturing.

    So when someone asks "what percentage of local value addition makes something truly 'produced' locally?" ask them to name a number. Then show them which "manufacturing nations" fail their test. The truth is, the question itself is designed to ensure Pakistan can never win. It's intellectual gerrymandering. Set the standard at whatever Pakistan hasn't achieved yet, discount labor arbitrage, discount or ignore benefits gained, then move it again when they get there. Meanwhile, people that actually understand the business do appreciate what Pakistan has accomplished. It includes at least the following:

    1. A near-total transformation of a major consumer goods sector from imports to domestic production in under a decade
    2. Tens of thousands of skilled jobs created
    3. Billions in foreign exchange saved
    4. An industrial ecosystem taking root and growing
    5. Human capital developing at scale
    6. Electronics export potential emerging

    Every successful manufacturing nation started exactly where Pakistan is now. The critics can keep moving goalposts. The factories keep running. The workers keep getting paid. The capability keeps building.


    https://x.com/amirhusain_tx/status/2016694941993590808?s=

  • Riaz Haq

    Apple is set to begin manufacturing and refurbishing iPhones in Pakistan, aiming to establish a regional export hub for mobile devices, according to reports in February 2026. The plan, supported by the Pakistan government under a new Mobile and Electronics Manufacturing Framework, includes incentives like an 8% performance bonus and discounted land for local assembly and repair.
    The Economic Times
    The Economic Times
    +4
    Key details:
    Manufacturing & Refurbishing: The agreement involves both assembling new iPhones and establishing a facility to repair/refurbish 2-3 year-old models for international re-export.
    Economic Impact: The initiative is expected to generate approximately
    $
    100
    $
    1
    0
    0
    million in re-export revenue in its first year.
    Incentives: The Pakistan government has proposed enhancing performance-based incentives for manufacturers to 8% to attract Apple and other tech giants, encouraging a shift toward localization.
    Location: Reports suggest Air Link Communication plans to open the first official Apple retail store by late 2025.
    Hindustan Times
    Hindustan Times
    +4
    This move marks a significant shift in regional supply chain strategies and aims to boost Pakistan's local manufacturing capabilities.