Pegatron To Invest Up To $1 Billion In Indonesian IPhone Chip Factory

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Roseanne Devon

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Jul 13, 2024, 10:22:29 AM7/13/24

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The Hosur factory, built at an investment of INR 50 billion and spread across 500 acres, currently employs around 15,000 people. The expansion of the facility would take 12-18 months and result in employment of 25,000-28,000 people.

Meanwhile, governments continue to prioritize chip investment as the global race for semiconductor supremacy heats up. India successfully attracted Micron to build a $2.75 billion facility, which has now begun construction, as the country hopes to cement itself among top chip nations.

Pegatron to Invest up to $1 Billion in Indonesian iPhone Chip Factory

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For India, growing the domestic semiconductor industry is a top priority. The government has taken significant strides in recent years to help realize this goal by allocating generous subsidies and other incentives. Those investments are now starting to be realized as U.S.-based chipmaker Micron Technologies has officially broken ground on its $2.75 billion chip assembly and test facility in India.

In July, 45 new chip projects made progress, which included contract signings, start or completion, commissioning, and more. Of those, 20 projects are newly signed while 15 are nearing completion or commissioning. The total planned investment is just over $11 billion as China hopes to reshape its domestic chip supply chain and increase self-reliance. Indeed, Chinese President Xi Jinping has made the latter a key issue as trade tensions with the rest of the semiconductor world remain icy.

In the meantime, China is investing heavily in its domestic chip industry as it seeks to be self-sustainable. The country recently announced a $40 billion investment fund designed to boost chip manufacturing. The U.S. also continues to develop its domestic industry, though workforce shortages, sky-high inflation, and economic tensions with China remain key barriers. Chipmakers have also warned that broad Chinese trade restrictions are a risk to the U.S. chip sector and create unnecessary tension and uncertainty in the market.

In the U.S., the CHIPS Act has spurred chipmakers to bring their operations stateside. TSMC is spending $40 billion to open two advanced chip fabs in Arizona, though it is currently facing a shortage of skilled workers. Meanwhile, countries like India and Japan are working hard to expand their domestic chip industries to compete with the U.S., China, Taiwan, and South Korea. Subsidies in both nations have led to international investment and attracted interest from major chipmakers.

In May, Onsemi stated that it was considering investing $2 billion to boost its SiC production capacity. In a statement to Reuters, El-Khoury said the firm is open to building a new fab for the chips if necessitated by continued demand.

Pegatron signed a letter of intent with the Indonesian government in 2019 to invest up to 1 billion in an Indonesian factory to assemble "chips for Apple smartphones". Pegatron also started assembling iPad and MacBook devices in Indonesia from June 2019 according to a DigiTimes report.