Guide for local content and procurement teams · Saudi Arabia

Local content units in Saudi Arabia: what they do, and how they raise the local share of IT and network equipment

A local content unit in Saudi Arabia is the team inside an organisation that is responsible for developing local content in its purchasing. In government entities, these teams were set up by royal approval in November 2021, at the request of the Local Content and Government Procurement Authority (LCGPA), and they report to the head of the entity. This guide explains what the unit does, which tools it applies and how it can raise the local share of IT and network equipment purchases, and what it can ask of a supplier.

Ask about locally assembled network devices Practical steps for IT and network purchases

What it is: the team responsible for local content in an entity's tenders, purchasing and contracting. Entities may call it a team, a unit or a department.
Legal basis: royal approval announced on 2 November 2021, covering government entities funded from the state's general budget.
Reporting line: the head of the entity.
Main work (as reported in 2021): coordinating with LCGPA, applying local content requirements, giving technical opinions on bids, handling complaints from the private sector and reporting to LCGPA.
Tools it applies: the mandatory list, the price preference for national products, local content weight in evaluation and minimum local content requirements.

What a local content unit is in Saudi Arabia

On 2 November 2021, the Saudi Press Agency announced royal approval of LCGPA's request to form local content development teams in all government entities funded from the state's general budget that carry out tenders, purchasing and contracting. Each team handles all tasks and responsibilities related to developing local content in its entity, and reports to the head of the entity.

Entities organise this work in different ways. Some keep the name "team", while others set it up as a unit or a department for local content. The search term "local content unit" usually refers to this function. Some companies run a similar function for their own purchasing and their local content certificate.

LCGPA works with these teams directly. In October 2023, for example, it held its second meeting for the local content development teams of government entities.

What the unit does

News reports of the 2021 approval listed the teams' tasks:

Tasks of local content development teams
Task	In practice
Coordinating with LCGPA	Applying local content requirements, and following localization and knowledge-transfer agreements
Technical opinion on bids	Checking local content requirements when bids are examined
Private sector complaints	Receiving and handling complaints from suppliers and contractors
Data and reports	Providing the data LCGPA requests, and periodic reports on local content development

The tools the unit applies

Each tool has its own rules. The unit's job is to apply the right one to each purchase.

Local content tools in government purchasing
Tool	What it does	Read more
Mandatory list of national products	Agencies must buy listed national products; non-compliant bids or items are excluded from supply tenders	The mandatory list explained
Price preference for national products	For national products not on the mandatory list, foreign products' prices are treated as 10% higher when bids are compared	Local content preference in government tenders
Local content weight in financial evaluation	In high-value contracts other than supply contracts, price carries 60% of the financial evaluation by default; the rest comes from local content factors and, for companies listed on the capital market, that listing	Target local content percentage
Minimum local content in the establishment's certificate	A condition for benefiting from the mandatory list for a growing number of products	Local content certificate: what it measures

IT purchasing is also in scope. In April 2026, LCGPA announced that it is applying the local content weight mechanism to government purchases of management consulting and IT services.

Raising the local share of IT and network equipment purchases

IT and network equipment is bought as devices, software and services, often in one contract. A unit can raise the local share with practical steps:

Split the bill of quantities. List devices, software and services separately, so each item can be checked against the tool that applies to it.
Check the device categories early. Search the current mandatory list on LCGPA's platform by product description before the technical specification is written.
Look for local sources per device. For customer devices such as ONT, 5G CPE and Wi-Fi equipment, ask national factories which models they can build and at which stage.
Write the requirements into the tender. Put local content requirements and the documents you will ask for into the tender documents, not after award.
Ask for the right documents. Proof of national origin, the factory's registration for the product and, where required, its local content certificate.
Check what is delivered. Match the delivered models and versions to the compliant ones named in the bid.
Document exceptions. If national factories cannot supply, collect the evidence LCGPA's rules require before the tender is issued.

What a unit can ask of a device supplier

Where the work happens: a written statement of which manufacturing steps take place in the Kingdom for the device in question.
The factory's certificates: management-system certificates and the factory's local content certificate, to be checked with LCGPA.
Listing and registration: whether the factory is listed for the product on LCGPA's platform.
Model traceability: the model and version supplied, tied to the documents provided.
Capability in writing: whether the factory can build the device, in what volumes and by what date.

A supplier does not set an entity's local content figures. They are measured under LCGPA's rules.

How IK Semiconductor supports local content work

IK Semiconductor (Interkey Semiconductor) is an Interkey group company that assembles network devices in Riyadh. For a local content unit, or for the suppliers and integrators bidding to its entity, it can provide:

A statement of local work. At the SKD stage, partly built sub-assemblies are completed, tested, loaded with firmware and packaged in Riyadh. CKD, which adds circuit-board assembly, is planned for 2028.
Certificates on request. IK Semiconductor holds a local content certificate issued by LCGPA, and ISO 9001, ISO 14001 and ISO 45001 certificates.
A listing to verify. IK Semiconductor is listed on LCGPA's mandatory list for government procurement. Whether the listing covers a specific device is checked per product on LCGPA's platform.
Written answers on capability. ONT, 5G CPE and Mesh Wi-Fi are listed as the factory's available SKD product lines, ready for manufacturing partnerships, and a 5G MiFi line is planned. We confirm in writing what the line can take on for a specific device.

IK Semiconductor does not issue local content certificates or calculate scores, and does not fabricate chips.

Questions local content teams ask

Is a local content unit required in every government entity?

The 2021 approval covers government entities funded from the state's general budget that carry out tenders, purchasing and contracting. Check how your own entity has organised the function.

Who does the local content unit report to?

According to the announcement of the approval, the team reports to the head of the government entity.

Is the local content unit part of LCGPA?

No. It sits inside each entity and coordinates with LCGPA, which sets the rules and mechanisms.

What was the "Local Content and Private Sector Development Unit"?

A unit at the Council of Economic and Development Affairs that appears in Saudi Press Agency reports from 2017 and 2018. It is a different body from the teams formed inside entities in 2021.

Does buying devices assembled in the Kingdom count towards local content?

Buying from a manufacturer in the Kingdom is spending in the Kingdom. How much of it counts, and whether a device meets a specific requirement, follows LCGPA's rules for that product and mechanism.

Ask about locally assembled network devices

Tell us the device category, the approximate quantity, the tender or purchase it is for and the documents your team needs. We will reply with what the Riyadh line can assemble at its current stage and which documents we can provide.

info@interkey-sc.com.sa · +966-11-2180999 · +966-55-3475469 · Riyadh, Saudi Arabia