Smartphone Manufacturers Halt Production Due to Pakistan’s Economic Crisis

Pakistan’s mobile phone industry is facing a major setback as several manufacturers have stopped their operations in the country. The non-opening of Letters of Credit (LCs) is one of the main reasons behind the companies’ decision.

The shortage of raw materials has made it difficult for smartphone manufacturing in Pakistan. Transsion Techno Electronics, a Chinese company that manufactures mobile phones under the China-Pakistan Economic Corridor (CPEC), has also stopped production in Pakistan.

Transsion Techno Electronics started its operations in early 2019 as a joint venture between a Chinese and a Pakistani company. It produced around 0.3 million smartphones per month and offered employment to 12 Chinese managers, 400 Pakistani engineers, and 2500 male and female employees.

However, due to the shortage of raw materials and components, the company has been forced to shut down. Former Chairman Board of Investment (BoI), Azfar Ahsan, has written a letter, which is available with ProPakistani, to PM Shebaz Sharif, urging him to take immediate action.

He stated that 30 other mobile phone manufacturers, including Samsung, Xiaomi, Vivo, OPPO, Nokia, Tecno, Infinix, and Itel, are also experiencing identical challenges. The raw materials shortage and the frozen LCs since January 2023 have put employment and the economy at risk, he remarked.

Azfar further added that massive layoffs are further exacerbating the situation, while the industry requires $100 million per month to stay operational at even 50% capacity and to retain the 35,000-40,000 direct and indirect jobs.

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