TEMPO.CO, Jakarta - Indonesia may become a hub for the Taiwanese electronics industry after the Taiwanese technology company Pegatron intends to increase its investment in Indonesia by US$40 million. "We believe that Indonesia may become a hub for the Taiwanese electronics industry, with the additional investment of US$40 million from Pegatron," said Harjanto, the Director General of Metal, Machinery, Transportation Equipment and Electronic Industries of the Industry Ministry, in a written statement released Saturday.
The investment is the start of the planned investment of US$1.5 billion that the company will be realized in stages, he said.
Pegatron will officially operate its plant in Batam, Riau Islands Province.
The planned investment is part of the company’s efforts to diversify manufacturing following the escalation of the US-China trade war tensions, he said.
Pegatron, which is now the largest supplier of components to Apple, will produce components of smart-home products such as computers and wireless telecommunication devices and components of smartphones by building a plant on a hectare of land in Batamindo.
The plant, which will employ nearly 1,800 workers, will be the first to operate in Indonesia and Southeast Asia. Earlier, Pegatron has established cooperation with PT Sat Nusapersada di Batam.
The presence of Pegatron will have a positive impact on the growth of the national electronics industry particularly in Batam, Director of Electronic and Telematic Industry of the Industry Ministry Janu Suryanto believed.
"With the presence of Pegatron, we hope the export of electronic products will increase significantly," he said.
Data from the industry ministry shows that the production growth in the computer, electronic and optic industry reached 2.78 percent in the first quarter of 2019 compared to minus 4.8 percent in the same period last year.
Until the second quarter of 2019, the number of electronic plants in Indonesia increased by 21. The electronics industry is believed to be one of the sectors capable of contributing significantly to the national economy.
"Hence, the electronics industry is one of the five manufacturing sectors whose development receive priority particularly in the face of the digital era. This is relevant to the roadmap for Making Indonesia 4.0," he said.
In 2018, the investment in the electronic industry hit a record high of Rp12.86 trillion compared to Rp7.81 trillion a year earlier. Similarly, the export of electronic products rose to US$8.2 billion in 2018 compared to US$7.9 billion the year before.