JAKARTA: State asset fund Danantara signed a framework agreement with Arm Limited in London on Monday in a bid to build domestic semiconductor capabilities.
The signing was witnessed by President Prabowo Subianto during his official visit to the United Kingdom.
“This cooperation aims for Indonesia to master semiconductor technology, and Arm is one of the companies that controls the semiconductor market, especially in design.
“So, this is the most upstream part of the semiconductor industry,” Coordinating Economy Minister Airlangga Hartarto said after the signing ceremony.
Airlangga said Arm controls around 96% of global automotive chip technology and nearly 94% of chip design for data centres and artificial intelligence.
Through the partnership, Indonesia aims to fast-track its expertise of strategic technologies that underpin modern digital innovation.
“With this cooperation, it is hoped that Indonesia can train 15,000 engineers within the Arm ecosystem so they can master chip design technology.
“The cooperation plan will also extend to the next generation of semiconductors, so that Indonesia develops capabilities in semiconductor design,” he added.
The minister said the partnership would strengthen Indonesia’s technological independence, alongside broader government priorities in food and energy security, describing it as “a leapfrog for the digital ecosystem”.
In January, Airlangga revealed that the government had earmarked an initial US$125mil to develop the local chip design industry, including the partnership with Arm.
This is not the first time the Indonesian government has pursued its semiconductor ambitions.
The country hosted semiconductor plants in the 1970s through partnerships with US firms, including Fairchild, and National Semiconductor.
However, a shift in industrial policy towards labour-intensive sectors led those investments to relocate to Malaysia by the mid-1980s.
Danantara chief executive officer Rosan Perkasa Roeslani said the partnership was expected to deliver wide-ranging benefits for industrial development while reinforcing national technological sovereignty.
“There will be six industries selected for the development of these chips, and our engineers will be trained by Arm, either by sending them here (to London) or by bringing their instructors to Indonesia,” Rosan said.
The six national chip design development tracks will focus on strategic intellectual property, covering automotive technology, the Internet of Things, data centres, home appliances and two additional areas yet to be determined, potentially including futuristic technologies such as autonomous vehicles and quantum computing.
Danantara is set to further discuss these priorities to ensure that the resulting intellectual property is held by Indonesia.
The deal adds to Jakarta’s broader push to secure strategic partnerships with global technology firms.
It precede another major semiconductor initiative in the week, when Indonesian and US companies signed trade and investment agreements in Washington, including two semiconductor joint ventures, one valued at US$4.89bil with Essence Global Group and another deal of undisclosed value with Tynergy Technology Group. — The Jakarta Post/ANN
