Jakarta, INTI - The government is preparing measures to ensure that the national technology industry does not remain limited to assembly activities.
The Ministry of Communication and Digital is encouraging a transition toward higher value-added semiconductor production, aimed at creating new economic opportunities.
Deputy Minister of Communication and Digital, Nezar Patria stated that Indonesia needs to promptly enter the global semiconductor supply chain as a realistic short-term step.
“We must first enter the global supply chain. We need to be present in strategic components. From there, Indonesia’s bargaining power will grow,” said Deputy Minister Nezar Patria during a meeting with PT Sat Nusapersada Tbk at the Ministry of Communication and Digital office in Central Jakarta on Tuesday, January 27, 2026.
Indonesia is considered to have a strong initial foundation to support this move.
One of Indonesia’s key strengths lies in its silica sand reserves, which serve as the raw material for silicon wafers, the core component in semiconductor chip production.
Deputy Minister Nezar explained that the rapid expansion of the artificial intelligence industry has significantly increased demand for silicon wafers.
The global chip shortage presents an opportunity for countries with abundant raw materials, such as Indonesia.
“Demand for silicon wafers is extremely high as the AI industry is growing rapidly. This is a rare momentum that must be seized,” he said.
Beyond natural resources, Indonesia’s neutral position amid global geopolitical tensions is also seen as a strategic advantage.
The government sees an opportunity to attract partners from multiple countries while ensuring meaningful technology transfer.
“What we are pursuing is technology transfer. If it is only about labor, the long-term impact will be limited,” Deputy Minister Nezar stressed.
To foster the growth of the national industrial ecosystem, the Ministry of Communication and Digital is also implementing the Domestic Component Level (TKDN) policy.
Strengthening Domestic Content Requirements in the Tech Industry
Mobile phones, handheld computers, and tablet products are required to meet a minimum Domestic Component Level (TKDN) of 35 percent.
According to Deputy Minister Nezar, this policy creates space for the growth of domestic supply chains.
Local production is expected to expand in line with rising demand for components within the country.
Through this approach, the government aims to elevate the national technology industry to a higher level.
Rather than focusing solely on assembly, the policy is intended to enable Indonesia to shape its position in the global semiconductor industry while delivering broader economic benefits to the public.
Conclusion
Through the implementation of a 35 percent TKDN requirement, the Indonesian government aims to strengthen domestic supply chains and stimulate higher-value production within the national technology sector. By moving beyond simple assembly activities, the policy is designed to elevate Indonesia’s role in the global semiconductor industry while generating broader and more sustainable economic benefits for society.
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