Pegatron to Invest up to $1 Billion in Indonesian iPhone Chip Factory

Apple supplier Pegatron plans to invest up to $1 billion in an Indonesian factory to produce chips for Apple smartphones, an Indonesian ministry official said on Tuesday (via Reuters).


The Taiwan manufacturer made the pledge in a signed letter to the Indonesian government, in which it said the chips would be produced in partnership with Indonesian electronics company PT Sat Nusapersada, according to Deputy Minister Warsito Ignatius.

Pegatron expects the investment to come somewhere between $695 million and $1 billion, although the variables influencing the exact amount have not been disclosed.

In December 2018, Apple was said to be looking to shift production of older iPhones to Pegatron in an effort to avoid losing billions in revenue as a result of its patent dispute with Qualcomm. That dispute has since been resolved, however rising trade tensions between the U.S. and China has put manufacturers in both countries on alert. Pegatron has assembly plants in China, which suggests its pledge of Indonesian investment could be a contingency plan.

According to today's report, the new Indonesian factory might also be used to produce MacBook components, although that operation "would not be in the short term," Ignatius told Reuters.

A DigiTimes rumor in May 2018 tipped Pegatron to pick up orders from Apple to produce a MacBook powered by an ARM processor, although the information it was based on may have been misconstrued with the Touch Bar on Apple's MacBook Pro, which is already powered by an ARM-based T1 chip as a companion processor. Apple said in 2017 that it had no plans for Macs powered solely by ‌ARM‌ chips, rather than Intel processors.

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9 months ago

Apple supplier Pegatron plans to invest up to $1 billion in an Indonesian factory to produce chips for Apple smartphones, an Indonesian ministry official said on Tuesday


Pegatron wouldn't need a billion if they were only doing assembly, which is what they do in their current business. So I assume they are actually making chips, as in Fabs.

But why ? And why Indonesian ?

They are partnering with a local company Sat Nusapersada, which is another assembler as well just like Pegatron and Foxconn.

This story doesn't make much sense to me.
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Edit: And so I decide to dig a little deeper.

The president of Pegatron ( In US's terms he would be CEO ) actually state in Feb / March they are not investing $1B in Indonesian. ( Make sense if you look at Pegatron's revenue and Cash Flow, $1B is not small amount of money )
They intent ( i.e Not confirmed ) to invest UP TO $300M. With its initial investment at $40M. And they are moving some assembly line outside of China to hedge against the trade war. They are also looking at many other options such as Vietnam and Thailand.

The $1B number is said to be oriented from an Indonesia government official in late 2018.

And none of the previous news and rumours or statements made anything about producing chips. Which is entirely a different business and require different level of technical knowledge and expertise.

I guess Reuter just want a story out for whatever reason.
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