Thematic image only. The US-based tech giant has acquired land for the US$1 billion-facility on the island, according to Indonesia’s investment minister. PHOTO: UNSPLASH
Apple has begun work on a factory worth US$1 billion [Rp 16 trillion] on the island of Batam in Riau Islands to make its AirTag tracking devises, according to the government.
Investment and Downstream Minister Rosan Roeslani said the United States-based tech giant had acquired land to build the plant.
The government has been pushing for direct investment from Apple to revoke a sales ban that prevents the company from selling its latest iPhone model in the country, but the AirTag factory project has yet to convince the Industry Ministry to lift the ban.
“We have managed to convince them [Apple] to enter Batam. The site has been acquired, shown to us and we have done cut and fill to start construction. It is expected that, in early 2026, in February, it will be ready for the AirTag [production],” Rosan said on Wednesday, as quoted by detik.com.
He acknowledged that the construction project was still at an early stage but expressed his expectation that more Apple suppliers would invest in the country.
Rosan noted that other countries, namely Vietnam, had attracted at least 36 Apple suppliers, as well as Malaysia and Thailand with 26 suppliers, adding that “this is something we want to do as well”.
The AirTag facility indicates Apple’s commitment to invest in Indonesia, the investment minister said, while expressing hope for the company’s investment to increase over time from $1 billion to $5 billion, “and the target is $10 billion”.
The manufacturing facility is projected to supply 65 percent of Apple’s AirTag global demand and create “up to 2,000” jobs, according to Rosan.
The government banned sales of the latest iPhone 16 in the country last year, arguing that Apple had failed to comply with rules requiring its products to meet a 35 percent local content requirement for imported smartphones.
The threshold is expected to be raised to 40 percent in the near future. Companies can comply with the policy by manufacturing their devices inside the country, developing firmware locally or investing in local innovation.
Apple has sought to have the ban lifted in return for investment. In November last year, it made a $100 million investment proposal, but that failed to convince the government to revoke the ban.
That figure already marked an increase from a previous proposal of $10 million in early November, shortly after the government imposed the ban on new iPhone sales. The government then pushed Apple to up the investment to $1 billion.
When Apple committed to the $1 billion investment to make AirTag tracking devices in Indonesia, the government welcomed the idea but said the sales ban would remain in place as the company still failed to meet the local content requirement.
Industry Minister Agus Gumiwang Kartasasmita said the plant did not satisfy the conditions to lift the sales ban, arguing that “the investment is unrelated to smartphone components”.
Apple previously established developer academies as a substitute for manufacturing facilities to satisfy local content rules, but the investment realization reached about Rp 1.5 trillion, falling short of its Rp 1.7 trillion pledge, according to the Industry Ministry.
Rival phone makers such as South Korea’s Samsung Electronics and China’s Xiaomi have invested Rp 8 trillion and Rp 55 trillion, respectively, to produce their devices locally, the Industry Ministry said.
Asia News Network/The Jakarta Post
