Indonesia is making every effort to seize the development opportunity of the semiconductor industry, positioning it as a high-value strategic industry to support economic growth. Facing rapid global technological development and surging demand for chips across various industries, the Indonesian government is not content with merely being a consumer market for electronic products. Instead, it is committed to upgrading its domestic industrial level and participating in the division of labor in the global semiconductor value chain. The Ministry of Industry has clearly stated that it will strengthen high-tech industries, including semiconductors, as an important foundation for industrial transformation and national technological independence.
Semiconductors are regarded as the core support for key areas such as electronics, automotive, telecommunications, energy, and digital transformation. If related technologies cannot be mastered, the competitiveness of Indonesia's industry will find it difficult to achieve a leapfrog improvement. Looking at domestic demand, Indonesia produces approximately 30 to 60 million mobile phones annually, and the target demand for laptops in 2026 is 1.57 million units, all of which require large quantities of chips. In 2025, Indonesia's automotive production reached 803,867 vehicles, among which the chip usage for electric vehicles and hybrid vehicles can be three times that of traditional fuel vehicles, indicating a huge market potential. According to GlobalData, the global semiconductor market grew from $407.9 billion in 2017 to $501.3 billion in 2021, an increase of 23%. With the popularization of electrification, digitalization, and artificial intelligence, demand will continue to rise.
However, Indonesia faces a severe dependence on imports. Semiconductor imports soared from $2.33 billion in 2020 to $4.87 billion in the first 11 months of 2025, nearly doubling, highlighting the vulnerability of the supply chain. To address this, Indonesia will focus on chip design as the starting point for the industry. The Ministry of Industry has been promoting related work since 2019, adopting a pragmatic and gradual approach and for now not directly engaging in the highly difficult manufacturing stage. Chip design is regarded as a reasonable entry point into the high-end industrial chain, requiring high-end talent, a research ecosystem, and collaboration among government, industry, academia, and research institutions.
Currently, chip design and development have been incorporated into Indonesia's national development plan. The semiconductor ecosystem project for 2025-2029 has been included in the overseas loan program, with a financing scale of US$16.185 million. At the end of January 2026, the Ministry of Industry held discussions with the Asian Development Bank for support, including preparation of standards, feasibility studies, and project implementation. The government has also issued a National Semiconductor Development Roadmap, focusing on four pillars: materials, design, front-end manufacturing, and back-end packaging and testing, supported by talent, research, infrastructure, and industrial policies.
Indonesia plans to promote the establishment of a non-profit Indonesia Chip Design Collaboration Center (ICDeC) to strengthen talent and technology reserves in integrated circuits and consolidate the R&D foundation. Although the semiconductor industry requires huge investments, cutting-edge technology, and internationally competitive talent, and the challenges are daunting, Indonesia has a clear goal: to gradually transform from a chip importer to a participant and innovator, leveraging its large domestic demand, continuously growing industrial demand, and stable policy and financial support, to strive for a place in the global high-end industrial chain.
Indonesia is making every effort to seize the development opportunity of the semiconductor industry, positioning it as a high-value strategic industry to support economic growth. Facing rapid global technological development and surging demand for chips across various industries, the Indonesian government is not content with merely being a consumer market for electronic products. Instead, it is committed to upgrading its domestic industrial level and participating in the division of labor in the global semiconductor value chain. The Ministry of Industry has clearly stated that it will strengthen high-tech industries, including semiconductors, as an important foundation for industrial transformation and national technological independence.
Semiconductors are regarded as the core support for key areas such as electronics, automotive, telecommunications, energy, and digital transformation. If related technologies cannot be mastered, the competitiveness of Indonesia's industry will find it difficult to achieve a leapfrog improvement. Looking at domestic demand, Indonesia produces approximately 30 to 60 million mobile phones annually, and the target demand for laptops in 2026 is 1.57 million units, all of which require large quantities of chips. In 2025, Indonesia's automotive production reached 803,867 vehicles, among which the chip usage for electric vehicles and hybrid vehicles can be three times that of traditional fuel vehicles, indicating a huge market potential. According to GlobalData, the global semiconductor market grew from $407.9 billion in 2017 to $501.3 billion in 2021, an increase of 23%. With the popularization of electrification, digitalization, and artificial intelligence, demand will continue to rise.
However, Indonesia faces a severe dependence on imports. Semiconductor imports soared from $2.33 billion in 2020 to $4.87 billion in the first 11 months of 2025, nearly doubling, highlighting the vulnerability of the supply chain. To address this, Indonesia will focus on chip design as the starting point for the industry. The Ministry of Industry has been promoting related work since 2019, adopting a pragmatic and gradual approach and for now not directly engaging in the highly difficult manufacturing stage. Chip design is regarded as a reasonable entry point into the high-end industrial chain, requiring high-end talent, a research ecosystem, and collaboration among government, industry, academia, and research institutions.
Currently, chip design and development have been incorporated into Indonesia's national development plan. The semiconductor ecosystem project for 2025-2029 has been included in the overseas loan program, with a financing scale of US$16.185 million. At the end of January 2026, the Ministry of Industry held discussions with the Asian Development Bank for support, including preparation of standards, feasibility studies, and project implementation. The government has also issued a National Semiconductor Development Roadmap, focusing on four pillars: materials, design, front-end manufacturing, and back-end packaging and testing, supported by talent, research, infrastructure, and industrial policies.
Indonesia plans to promote the establishment of a non-profit Indonesia Chip Design Collaboration Center (ICDeC) to strengthen talent and technology reserves in integrated circuits and consolidate the R&D foundation. Although the semiconductor industry requires huge investments, cutting-edge technology, and internationally competitive talent, and the challenges are daunting, Indonesia has a clear goal: to gradually transform from a chip importer to a participant and innovator, leveraging its large domestic demand, continuously growing industrial demand, and stable policy and financial support, to strive for a place in the global high-end industrial chain.