Gov't Confirms Gradual Entry of Apple Suppliers Investment
JAKARTA, investorturst.id – Indonesia's investment tsar confirms that investments from Apple suppliers have begun to enter Indonesia, marking a first step the company's effort in complying with regulation to be able to sell its latest products like iPhone 16 in the Southeast Asia's largest smartphone market.
The initial investment from these suppliers is valued at $1 billion, with subsequent phases potentially reaching up to $10 billion.
“And indeed, it's not Apple itself investing, but its suppliers. In other countries as well, it is the suppliers who invest,” Minister of Investment and Downstreaming/Head of the Investment Coordinating Board (BKPM) Rosan Roeslani said at an event at the IDN Headquarter, Jakarta, on Wednesday, January 15, 2025.
Rosan stated that the permit for one of these suppliers has already been processed by the Ministry of Investment and Downstreaming/BKPM. Moreover, the supplier has agreed to purchase land in Batam for a factory. The factory is expected to be operational by early 2026.
As part of the first phase of investment, one of Apple's suppliers in Indonesia will supply 65% of the global demand for AirTags. This AirTag factory is projected to create 2,000 jobs.
A single Apple product can involve hundreds of suppliers. For example, the latest Apple iPhone 16 requires more than 300 suppliers across various countries. Vietnam accommodates 38 suppliers, while Malaysia and Thailand provide space for over 25 suppliers each, supplying parts for Apple's products.
“And we only have one here, and the investment is small,” he added.
Rosan believes that after this phase is completed, the government will discuss potential investments that could reach up to $10 billion.
The ongoing dispute between Apple and Indonesia centers on the country's local investment and manufacturing requirements, which Apple has struggled to meet despite its significant market presence.
Indonesia's government mandates that smartphone manufacturers comply with a 35% local content regulation for 4G and 5G devices, which can include hardware, software, or investment contributions.
Apple, while a dominant player in the premium smartphone segment, has faced criticism for relying on imported devices and failing to establish substantial local production or investment initiatives. This standoff has hindered the official distribution of new iPhone models, such as the iPhone 16 series, in Indonesia.
In addition to the AirTag vendor investment, Rosan mentioned that in the first quarter of 2025, another US company will invest in Indonesia, with an investment value exceeding $1 billion.
New investment plans are also coming from Oracle, which, according to Rosan, has held discussions with him. The software and cloud storage company has expressed its interest in investing in Indonesia.
Rosan further emphasized the importance of a stable investment climate, stating that there should be no surprises for investors. Investment, he noted, is a long-term commitment, “not just one or two years,” he said.