Apple is planning a $1 billion investment in a manufacturing facility in Indonesia, according to the country’s investment minister, Rosan Roeslani. The plant is expected to produce components for smartphones and other products, signaling Apple’s most significant commitment to Indonesia to date.
The announcement follows recent tensions between the tech giant and Indonesian authorities. In October, the government banned sales of the iPhone 16 due to Apple’s failure to meet regulations requiring at least 40% of the device’s components to be locally sourced. This week, the government escalated its demands by announcing plans to increase local content requirements further.
Minister Roeslani revealed that while details are still being finalized, Apple has shown interest in making a substantial investment to address these regulatory challenges. “We will discuss with them some more … our hope is for everything to be announced in the next week after receiving a written commitment from them,” Roeslani said, confirming the $1 billion figure he had mentioned earlier in the week.
This investment proposal comes after Indonesia rejected a smaller $100 million offer from Apple to build an accessory and component plant. Authorities deemed the amount insufficient to resolve the iPhone 16 sales ban. The rejection underscores Indonesia’s push for greater contributions to its economy from global corporations operating in its market.
While Apple has yet to establish manufacturing facilities in Indonesia, the company has operated developer academies in the country since 2018. These academies, however, have been viewed by the government as insufficient to meet local content requirements for earlier iPhone models. Typically, companies achieve compliance by sourcing components domestically or forming partnerships with local manufacturers.
Apple did not respond to requests for comment on the matter. With a population of 280 million, Indonesia represents a significant market for the tech giant, making the proposed investment a potential turning point in its strategy to align with the country’s regulatory framework.
Featured image courtesy of teropongbisnis.id
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