ANN/THE JAKARTA POST – Apple has commenced work on a USD1 billion (IDR16 trillion) factory in Batam, Riau Islands, Indonesia to produce its AirTag tracking devices, according to Indonesia’s government.
Investment and Downstream Minister Rosan Roeslani confirmed that the United States-based tech giant has acquired land for the facility, marking a significant milestone in its efforts to establish a manufacturing presence in Indonesia.
“We have secured Apple’s entry into Batam. The site has been acquired, and we’ve begun preliminary construction work. The factory is expected to be operational for AirTag production by February 2026,” Rosan stated, as reported by detik.com.
The minister acknowledged the project is still in its early stages but expressed optimism that Apple’s suppliers would follow suit and invest in the country.
Rosan pointed out that neighbouring countries, such as Vietnam, host at least 36 Apple suppliers, while Malaysia and Thailand have attracted 26 each.
“This is a model we aim to replicate,” he added.
The AirTag factory signals Apple’s commitment to investing in Indonesia, with Rosan projecting potential growth in investment from USD1 billion to USD5 billion, with a long-term target of USD10 billion. The facility is expected to supply 65 per cent of Apple’s global AirTag demand and create up to 2,000 jobs.
This development comes amid Indonesia’s ongoing ban on the sale of Apple’s latest iPhone 16 model, enforced due to non-compliance with a 35-per-cent local content requirement for imported smartphones.
The government plans to raise this threshold to 40 per cent, allowing companies to meet the requirement by manufacturing locally, developing firmware domestically, or investing in local innovation.
Apple sought to have the ban lifted in return for investment. In November last year, it made a USD100-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 USD10 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 USD1 billion.
When Apple committed to the USD1 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 IDR1.5 trillion, falling short of its IDR1.7 trillion pledge, according to the Industry Ministry.
Rival phone makers such as South Korea’s Samsung Electronics and China’s Xiaomi have invested IDR8 trillion and IDR55 trillion, respectively, to produce their devices locally, the Industry Ministry said.
