Pegatron Corp, a Taiwanese electronics manufacturer that assembles iPhones, is considering to set up a plant on Batam Island, Riau Islands. If confirmed, the investment is estimated to be worth USD 1 billion. It will also employ 8,000 to 10,000 workers in the rented factory.
Currently, Indonesia is competing against Vietnam and Thailand to secure the investment. Once Pegatron has made the decision, the company would need two quarters to move, install and certify equipment before the plant can be fully operational.
Batam was considered as a viable choice, considering the island’s position in a free-trade zone in the Indonesia-Malaysia-Singapore Growth Triangle. It is also strategically located near Singapore.
This move has been prompted by the trade war between the US and China, and the fear of US tariffs on products manufactured in China. Other companies have also indicated that they might move away production from China include another iPhone assembler, Wistron, Apple Watch makers, Quanta Computer and Compal and AirPods maker, Inventec. In January 2019, Wistron authorized its subsidiary in India to spend USD 341 million to expand operations in the country, which include assembly of the iPhone SE and iPhone 6S for the local market.
(Sources: Apple Insider; AsiaNews; The Jakarta Post; Nikkei Asian Review)