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Indonesia wants in on chip industry and has some things going for it
Indonesia is not wary of going head-to-head with more developed economies but still lacks some key requirements for success in the booming semiconductor business.
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A new type of 300 millimeter wafer with semiconductor chips of German manufacturer Bosch is seen in Dresden, eastern Germany, on May 31, 2021. (AFP/Jens Schluter )
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elatively low geopolitical risk has been identified as a competitive advantage that might draw investors to Indonesia as the government seeks a slice of the global semiconductor industry.
The bold initiative comes at a time when some countries appear concerned about the world’s heavy reliance on Taiwan amid surging demand for electronics.
President Joko “Jokowi” Widodo said the government planned to develop the ecosystem for the semiconductor industry this year, starting with investment in a polysilicon factory and chip design facility in Central Java.
“In the initial stage, this product will be focused on meeting solar cell needs,” Jokowi said at the inception meeting of the Business 20 (B20) forum, part of the Group of 20 (G20) forum, in late January. “However, in the next few years, it will be focused on semiconductor [supplies].”
Indonesia joins mainland China and South Korea, as well as countries around the world, that have announced plans to either develop or bolster the industry that produces chips to power a wide range of products, including computers, washing machines, credit cards and cars.
Read also: It’s time for semiconductor industry to flourish in Indonesia
The COVID-19 pandemic has exposed the logistical consequences of relying heavily on Hsinchu-based Taiwan Semiconductor Manufacturing Company (TSMC), a leading foundry that produces chips for tech giants like Apple.
