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Absorb Investment, Indonesia Develops Semiconductor Industry

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By: Panji Saputra)*

The prospect of the semiconductor industry in Indonesia is very good, because it has natural resources as its raw material. Therefore, the government woos foreign investors to invest in this country. With so many investors, it will be good because it will increase the country’s foreign exchange.

The government is very aggressive in developing the investment sector and has sent several representatives to lobby foreign investors, including Investment Minister Bahlil Lahadalia and Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan. Investment is needed to advance Indonesia. Moreover, the results are to overcome the impact of the pandemic and prosper the people.

One of the advantages of investing in Indonesia is the semiconductor industry (electrical conductors). In the era of information technology, this type of industry is needed. Therefore, the government is very aggressive in wooing foreign investors to enter Indonesia.

Minister of Industry Agus Gumiwang Kartasasmita stated that Indonesia and America are ready to build the semiconductor industry. Indonesia has a ‘treasure’ in the form of silica sand, which is located in Java, Sumatra and Kalimantan. This investment is expected to strengthen the value chain in other sectors, such as automotive, communications, and electronics.

This means that Indonesia has abundant natural resources, one of which is silica sand, which is the raw material for semiconductors. Foreign investors will be very profitable, if they open a business in Indonesia. The reason is because you don’t have to go far to find raw materials, so it saves transportation costs.

If there are resources, they must also be abundant and will not be afraid of running out of stock. Silica sand will be more valuable if it is processed into a semiconductor, and will be sold into useful and high-priced goods. This industry will both provide positive benefits, both for Indonesia and foreign investors.

Minister Agus continued, the semiconductor industry in America is very advanced, and there are many large factories such as Intel, Qualcomm, and so on. In a sense, they are ‘shooting targets’ aka investors who are expected to enter Indonesia. It is hoped that by lobbying and explaining the fact that Indonesia has a lot of silica sand, they will want to build a semiconductor industry in this country.

So far, Intel has invested in Malaysia. It is hoped that the government can persuade them to enter Indonesia. In addition to having natural resources to support the industry, Indonesia has more good prospects. Among them are human resources for workers in the industry (because the population is larger).

In addition, Indonesia also has a very good market because of its population of more than 200 million people. Foreign investors are obliged to understand this. They will agree to do business in Indonesia, realizing that the prospects are good and the market already exists.

The Ministry of Industry has drawn up a medium-term roadmap for the period 2022-2030, on the semiconductor industry. There are incentives for investors who will enter the country.

However, it should be understood that the incentives provided are not only monetary. The intended incentive could be the ease of regulation. Where the government already has the Omnibus Law on Job Creation, which has an investment cluster. There are various conveniences in it that make investors more able to move freely, and build the semiconductor industry with relief.

Moreover, President Jokowi gave direct guarantees to foreign investors to do business in Indonesia. The guarantee from the president is certainly very reliable. Foreign investors will be happy to come.

Meanwhile, Germany is also interested in building a semiconductor chip industry in Indonesia, to be precise in Batam. The Ministry of Industry supports the opening of the industry, and ensures that there are no shortages of semiconductor chips. Because the chip is useful for the electric vehicle industry. Currently, electric cars are in great demand and are the vehicles of the future, because they are environmentally friendly.

This is what is called sparking another industry, when there is a semiconductor industry and the results are used for the electric car industry. Currently there is only an electric car battery industry, which supplies factories in South Korea and America. It is not impossible if Indonesia can create its own electric car industry, especially with the support of many foreign investors.

Hopefully there are other countries that are interested in investing in Indonesia, both for the semiconductor industry and electric cars. Indonesia already has great potential, in the form of natural resources (silica sand), human resources (people who are smart and work hard), and a promising market (because there are more than 200 million Indonesian citizens).

The government keeps trying to attract foreign investors. There are many cooperation opportunities

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