Apple to Invest $1 Billion in Indonesia Manufacturing Plant, Says Government

Apple has announced plans to invest $1 billion in a new manufacturing facility in Indonesia, aiming to produce components for smartphones and other devices. The news was revealed by Indonesia's investment minister on Thursday, following a recent ban on iPhone 16 sales in the country.

Indonesia’s Local Content Requirements Spark Apple’s Investment

The ban on iPhone 16 sales, imposed in October, stemmed from Apple’s failure to meet Indonesia's local content regulations. These rules require at least 40% of the components in domestically sold phones to be produced locally. To further encourage local manufacturing, the Indonesian government is preparing to increase these requirements.

Discussions Underway for Final Approval

Investment Minister Rosan Roeslani confirmed that talks with Apple are ongoing, but the proposed $1 billion investment aligns with figures previously discussed. “We are hopeful to finalise everything within a week, pending a written commitment from Apple,” Roeslani said.

The minister also highlighted that a $100 million investment proposal from Apple for an accessory and component plant was rejected last week, as it was deemed insufficient to address the iPhone 16 ban.

Apple’s First Manufacturing Facility in Indonesia

This new facility would mark Apple’s first manufacturing site in Indonesia, a nation with a population of 280 million people. Despite lacking manufacturing operations in the country, Apple has been active in Indonesia through its application developer academies since 2018.

Strengthening Indonesia’s Role in the Global Supply Chain

The $1 billion investment aligns with Indonesia’s broader goals to position itself as a key player in the global electronics supply chain. By increasing local production capabilities, the country aims to attract further foreign investments and boost its economic development.

Strategic Implications for Apple

For Apple, this move could not only resolve the iPhone 16 sales ban but also strengthen its supply chain resilience in Southeast Asia. With growing regulatory pressures worldwide, including local manufacturing requirements, investments like this are becoming critical for maintaining access to key markets.

(Sources: investing.com, reuters.com)