Indonesia Seeks to Reduce Dependence on Chinese Technology as It Expands Semiconductor Industry

Indonesia is positioning itself to become a significant force in the global semiconductor industry, according to Coordinating Minister for Economic Affairs, Airlangga Hartarto. Speaking at the signing ceremony of the National Strategic Project agreement at the Wiraraja Green Renewable Energy and Smart Eco Industry Park in Batam, Hartarto emphasized the country’s growing potential in this sector.

Recently, a semiconductor team from the Organisation for Economic Co-operation and Development (OECD) visited Batam to assess the region’s semiconductor ecosystem, highlighting Indonesia’s efforts to be among the top seven global semiconductor manufacturers. This ambition was also a key focus during discussions at the Indo-Pacific Economic Framework for Prosperity (IPEF).

The government is keen on making the semiconductor industry a cornerstone of Indonesia’s economic growth, with a focus on enhancing human resources and localizing the production of semiconductors and sodium-ion batteries. By doing so, Indonesia aims to attract global investors and position itself as a leader in the emerging sodium-ion battery industry, which is seen as a new alternative in the battery market.

As Indonesia progresses, it must continue to remain cautious about over-reliance on Chinese technology, given China’s aggressive expansion in the tech industry, which has raised concerns about unfair trade practices and security risks. Developing a self-sufficient semiconductor sector will allow Indonesia to reduce its dependence on China and protect its economy from potential disruptions.

With the global shift away from Chinese manufacturing due to ongoing U.S. trade restrictions, Indonesia is well-positioned to benefit from these changes. Strengthening ties with Western countries and aligning with global standards could lead to increased foreign investment, job creation, and accelerated growth in Indonesia’s technology sector. In the long run, Indonesia’s ability to serve as a viable alternative to China will enhance its strategic importance on the global stage, bringing economic growth and leverage in trade negotiations.