SIFC’s Semiconductor Manufacturing Goals Seem Overly Optimistic

The Special Investment Facilitation Council (SIFC) has ambitious plans for Pakistan to make a significant entry into the semiconductor and chip design industry, aiming to reshape the country’s economic landscape. However, these ambitions may not align with the reality of Pakistan’s current economic and technical capabilities. Despite the potential for economic transformation, several challenges stand in the way.


India’s recent $15 billion investment into developing a local semiconductor ecosystem highlights the scale of investment and time required for such initiatives. In comparison, Pakistan’s financial situation, with $8 billion in dollar reserves and over $131 billion in debt, makes rapid development in the semiconductor industry seem less feasible.


Pakistan also faces challenges in terms of precision engineering and skilled manpower. A significant portion of the skilled workforce tends to move abroad or switch to freelancing for better opportunities. Strategic planning, investments, and support from wealthy allies could help Pakistan establish a presence in the global semiconductor market, albeit initially on a smaller scale.


The initial strategy involves leveraging tax incentives and foreign partnerships, particularly with China and the U.S., to attract multibillion-dollar investments in semiconductor and chip design centers. However, the substantial investment required for semiconductor manufacturing foundries, around $10 billion, and the high level of skill needed, are significant barriers.


The emphasis, therefore, might be better placed on chip design and testing, which could serve as stepping stones towards a more robust manufacturing capability in the future. Pakistan has a large, low-cost labor pool that could benefit from the global semiconductor shortage, provided there’s investment in education and training to develop the necessary skilled workforce. Building on these areas could pave the way for Pakistan to become a significant player in the semiconductor industry by 2035.