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Govt asks carmakers to keep chips coming to Indonesia
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President Joko “Jokowi” Widodo (third left) and his entourage visit a Hyundai factory for electric cars in Bekasi, West Java, on March 16. (AFP/Presidential Palace/Handout)
T
he government has asked global carmakers to prioritize their Indonesian factories for the supply of semiconductors as a chip shortage is hampering automotive production around the world.
Industry Minister Agus Gumiwang said on Wednesday that the government had made several trips to Japan, which is home to numerous car brands that dominate production in Indonesia, asking the headquarters of each carmaker to ensure the flow of semiconductors to Indonesia ahead of their other markets.
The government previously reached out to many countries, including Germany and the United States, in the hope of building domestic industries to eventually produce chips locally.
President Joko “Jokowi” Widodo announced in January the government’s intention to develop the ecosystem for the semiconductor industry this year. Relatively low geopolitical risk has been identified as a competitive advantage that might draw investors to Indonesia.
Read also: Indonesia wants in on chip industry and has some things going for it
With semiconductors hard to come by and trade of other components also disrupted, supplies for vehicles produced by Indonesia’s auto industry had become limited at a time when consumer demand for cars remained strong, Agus said.
“I want to make sure that their principals will prioritize semiconductors for their production in Indonesia, [so that] semiconductors from producers like Mitsubishi, Toyota and others will not go to factories outside Indonesia,” Agus told reporters at the Office of the Coordinating Economic Minister.
