Jakarta, INTI - The Indonesian government believes the country has significant potential to secure a strategic position within the global supply chain of the Artificial Intelligence (AI)-driven semiconductor industry, as worldwide demand for semiconductors continues to surge amid intensifying global technology competition.
According to Deputy Minister of Communication and Digital Affairs, Nezar Patria, semiconductors have become a critical component across various strategic sectors, ranging from AI development and data centers to modern defense systems.
“Semiconductors are the fuel behind every AI model being trained, every data center being built, and every defense system being operated. We can now say that semiconductors are the new oil,” Nezar stated in an official statement on Wednesday.
Indonesia is currently recognized as one of the world’s largest tin producers, with tin serving as a key material in the manufacturing of chips and electronic components.
In addition to tin, Indonesia also possesses substantial silica sand reserves, which are used as the primary raw material for silicon, a fundamental component in the semiconductor industry.
Indonesia Aims to Move Beyond Raw Material Exports
Despite its abundant natural resources, Nezar emphasized that Indonesia should not remain merely a supplier of raw materials for global industries. Instead, the government is pushing for downstream industrialization to ensure greater added value is generated domestically.
“We should not export raw materials alone. They should already be processed into semi-finished products, and we must master that capability ourselves,” he explained.
Beyond mineral resources, the government also sees major opportunities within Indonesia’s energy sector to support the growth of the AI industry, particularly in powering data centers that require large and stable electricity supplies.
“We have an advantage in energy, especially renewable energy. Our electricity production is abundant, and we even recorded a surplus last year,” Nezar said.
Digital Talent and Geopolitical Position Become Strategic Advantages
Indonesia is also considered to benefit from its demographic advantage. With a population of approximately 285 million people and an average age of around 30 years old, the country is viewed as having a strong digital talent base capable of supporting the expansion of the AI ecosystem.
To strengthen human resource readiness, the Ministry of Communication and Digital Affairs is currently developing the AI Talent Factory program in collaboration with multiple universities.
“We are gathering the best talents from universities and providing programs ranging from basic to advanced levels on how to develop AI solutions,” Nezar explained.
He also noted that Indonesia’s position as a non-aligned country provides a strategic advantage amid escalating global geopolitical competition in technology.
According to Nezar, Indonesia must define a strategic role within the global AI supply chain to ensure the country becomes not only a technology market, but also a major player in the future industrial ecosystem.
“We must become a strategic choke point, and we must be capable of controlling that choke point,” Nezar concluded.
Conclusion
Indonesia is positioning itself to become a strategic player in the global AI semiconductor supply chain by leveraging its natural resources, energy capacity, digital talent, and downstream industrialization strategy to strengthen its role in the future technology ecosystem.
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