Why Pakistan belongs in the semiconductor conversation

Editor's note: Decision Makers is a global platform for decision makers to share their insights on events shaping today's world. Shaza Fatima Khawaja is the current Federal Minister for Information Technology and Telecommunication of Pakistan. The article reflects the author's opinions and not necessarily the views of CGTN.

As semiconductor supply chains become more geographically diversified and strategically important, the question of where new capabilities can be developed is becoming increasingly consequential for Asia. For Pakistan, this opens a space that has received relatively limited attention: not as a center of semiconductor manufacturing, but as a potential contributor to selected parts of a much wider technology ecosystem.

For China, the question has a different significance. The depth of China's manufacturing and technology base gives its companies an expanding network of commercial relationships across the region. Pakistan's proximity to China’s domestic markets and emerging technical capabilities make it relevant to that discussion, provided the relationship can move beyond broad declarations of technological cooperation toward areas where both sides have a clear commercial interest.

Pakistan's semiconductor ambitions are already moving from policy formulation towards capability development. Current government programs are concentrated on building human capital and indigenous expertise in chip design, verification and related engineering rather than immediately pursuing capital-intensive fabrication. That emerging base creates scope for cooperation with Chinese companies in areas such as design, research, engineering and electronics manufacturing.

It also opens a potential new dimension for the China-Pakistan Economic Corridor (CPEC) 2.0. As the corridor's economic agenda places greater emphasis on industrialization, special economic zones (SEZs), technology and business-to-business cooperation, its infrastructure and industrial ecosystem could provide a platform for connecting specialized technical capabilities with production and export networks.

That is the strategic question: Can Pakistan develop a specialized role in the semiconductor economy that is commercially useful to both countries?

Pakistan's first opportunity is chip design

Pakistan's most immediate opportunity in the semiconductor economy lies in fabless chip design, an area centered on architecture, circuit design, verification and related engineering rather than the operation of fabrication plants. This is also where Pakistan's current semiconductor policy is beginning to build identifiable capacity, through design-focused training, research infrastructure and programs aimed at developing indigenous chip-design capabilities.

The economics of this entry point are important. Advanced fabrication requires enormous capital investment, highly specialized infrastructure and mature industrial ecosystems. Design, by contrast, is considerably more dependent on engineering expertise, software capability and intellectual property. This gives Pakistan a more realistic basis on which to establish an initial position in the value chain.

The immediate challenge is to move beyond training engineers toward producing commercially usable designs. That requires sustained access to electronic-design automation tools, stronger verification capabilities, industry-led research and a pathway from design and prototyping to tape-out and fabrication through international partners.

Pakistan's progress in this area will ultimately be measured not by the number of people trained, but by whether its investment in human capital and research produces designs, intellectual property and engineering capabilities that can compete in international markets.

China can turn emerging capability into commercial value

China's semiconductor strength creates a commercial opportunity for Pakistan precisely because the two economies are at different stages of development. China's companies operate across an extensive technology and manufacturing ecosystem, while Pakistan is developing capabilities in chip design and related engineering. This difference can create complementarity where the two sides identify activities that can be connected across their respective strengths.

For Chinese companies, Pakistan could offer access to an expanding pool of engineering talent and a cost-competitive environment for selected design and technical functions. Pakistan's domestic market also provides an opportunity to develop and test semiconductor-enabled products in sectors such as telecommunications, electronics and industrial technology. These factors become more valuable when they are connected to China's existing manufacturing and technology networks.

The most practical starting point is therefore commercial rather than institutional: Chinese companies working with Pakistani firms, universities and emerging design centers on defined projects. Such partnerships would allow both sides to establish capability through actual delivery, while creating pathways from design and engineering into fabrication and manufacturing networks.

For Pakistan, the objective is to become commercially useful to Chinese industry. For China, the opportunity is to develop another capable partner within its wider technology ecosystem. That is a stronger foundation for a semiconductor relationship than investment alone.

CPEC 2.0 can provide the industrial platform

The semiconductor opportunity becomes more commercially relevant when considered alongside the industrial direction of CPEC 2.0. The next phase of the corridor places greater emphasis on industrialization, private-sector participation, business-to-business cooperation and the development of SEZs, creating an environment in which technology-intensive activities can develop alongside manufacturing.

This is particularly relevant to semiconductor-related capabilities because design becomes more valuable when it is connected to the industries that use, manufacture and export technology products. Electronics manufacturing, chip design and verification, engineering services and applied research can reinforce one another when located within an ecosystem that provides infrastructure, logistics, skilled labor and access to suppliers.

The SEZs can therefore serve as a practical link between Pakistan's emerging technical capabilities and Chinese industrial networks. Chinese companies operating within or alongside these industrial clusters could connect Pakistani engineering talent with established manufacturing and supply chains, while Pakistani firms could develop capabilities around electronics, components, embedded systems and other technology-intensive applications.

The significance of CPEC 2.0 in this context is not that it needs to become a semiconductor program. Its value is in providing an industrial and commercial environment in which specialized technology capabilities can connect with production, investment and export activity. That creates a potential pathway from technical capacity to industrial value.

From emerging capability to regional integration

The commercial value of these capabilities can extend beyond individual projects as Pakistani firms become connected to wider Asian technology and manufacturing networks. Pakistan's electronics sector and domestic technology market can provide downstream applications, while its engineering capabilities can support selected functions within larger regional supply chains.

For Chinese companies, this creates opportunities to structure partnerships across different stages of the technology value chain. Pakistani firms and engineers could contribute design, verification and engineering services, while Chinese partners provide connections to manufacturing ecosystems, component suppliers, industrial expertise and established distribution networks. Over time, successful partnerships could support the development of products for markets beyond Pakistan.

Pakistan's geographic position adds another dimension. Connectivity with China, combined with access to South Asian, Gulf and Central Asian markets, gives technology companies the possibility of using Pakistan not only as a production location but also as a base for serving neighboring markets. The commercial case, however, will depend on the competitiveness and reliability of the capabilities developed within Pakistan.

For China, the opportunity is to add another commercially connected partner to an increasingly integrated Asian technology ecosystem. For Pakistan, deeper participation in these networks could strengthen its electronics industry, expand high-value exports and create a pathway for locally developed technical capabilities to reach international markets.

A semiconductor partnership built on capability

Pakistan's semiconductor opportunity will ultimately depend on whether emerging capabilities in design, engineering and electronics can become commercially competitive and connect with established technology networks. China is particularly well positioned to provide that connection through its manufacturing depth, supply-chain integration and expanding technology ecosystem.

For both countries, the greater opportunity lies in building commercial relationships around actual capabilities, through design partnerships, engineering, research, manufacturing and access to regional markets. CPEC 2.0 can provide part of the industrial platform for that integration, linking technology capabilities with investment, production and connectivity.

If this ecosystem develops successfully, semiconductors can become more than a new technology sector for Pakistan. They can become a further layer of economic integration between China and Pakistan, creating new channels for industrial cooperation, high-value exports and participation in Asia's evolving technology economy.

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