Indonesia is intensifying its efforts to develop the semiconductor and artificial intelligence industries as part of a broader strategy to strengthen its digital economy and establish new engines of national growth. These efforts reflect the country’s ambition to become a regional technology hub.
Speaking at a press conference on Wednesday, Coordinating Minister for Economic Affairs Airlangga Hartarto stated that semiconductors and AI are essential for Indonesia’s long-term economic transformation. He noted that by 2045, a significant portion of the nation’s GDP is expected to be driven by these two key sectors.
“Semiconductors and AI will be among the main engines of future growth,” he said.
To facilitate this development, the Indonesian government has introduced several strategic measures. First, a dedicated task force has been formed under the Coordinating Ministry for Economic Affairs to accelerate the growth of both industries. This task force is responsible for establishing a comprehensive semiconductor ecosystem, which includes chip design capabilities, workforce training and the construction of supporting infrastructure such as data centres.
Second, the government is prioritising human capital development. Scholarships will be provided for students pursuing undergraduate to doctoral degrees in science, technology, engineering and mathematics (STEM).
In addition, vocational training programmes and technology-focused research initiatives will be supported to meet the growing demand for skilled professionals in both the semiconductor and AI sectors.
Minister Hartarto highlighted that Indonesia is working closely with international academic institutions to build expertise. Existing collaborations include partnerships with Arizona State University and Purdue University in the United States. The government also aims to strengthen ties with universities in Singapore, reflecting the emphasis on global cooperation to develop national capabilities. He also mentioned the importance of aligning Indonesia’s talent development with international benchmarks and emerging industry trends.
Third, the government is encouraging the expansion of assembly, testing and packaging (ATP) facilities, with initial developments already underway in Batam. These facilities are a critical part of the semiconductor value chain and are expected to attract further investment and technology transfer. Batam is also being considered for future innovation clusters to house tech start-ups and research hubs.
A fourth strategic focus is increasing investment and trade in the semiconductor and AI industries. Hartarto assured that the government is committed to creating a conducive environment for investment and will continue to support the expansion of the industrial ecosystem.
“The government will ensure that the amount of investment in this sector will continue to increase along with the expansion of its industrial ecosystem,” he said. Efforts are also being made to simplify regulations and offer incentives for foreign investors.
Regarding AI, Minister Hartarto emphasised that it should not be viewed merely as an automation tool. He noted that AI has the potential to significantly enhance productivity across multiple sectors, from manufacturing and healthcare to education and agriculture.
Indonesia has already established an AI data centre in the Nongsa Special Economic Zone (KEK), which is set to become a cornerstone of the country’s AI development. The centre is expected to support domestic AI applications in smart cities, logistics and public services.
The government is currently preparing a comprehensive roadmap to guide the development of the national semiconductor and AI industries. This roadmap will align with Indonesia’s broader goal of becoming ASEAN’s largest digital economy. The country’s digital economy is projected to reach US$ 150 billion by 2025 and is expected to grow to US$ 600 billion by 2030.
At the regional level, ASEAN’s digital economy is forecast to expand from US$ 1 trillion to US$ 2 trillion with the implementation of the Digital Economy Framework Agreement (DEFA), further underscoring the importance of Indonesia’s strategic push in these high-potential sectors.
