JAKARTA: Indonesia has begun work on a roadmap to develop its silicon industry as a starting point for building a microchip industry in the country, but some ASEAN countries are far ahead in the semiconductor investment race.
The roadmap developed by the Ministry of Industry is expected to be ready by the end of next year and will serve as a guide for industrial development from 2025 to 2035, with the aim of developing onshore silicon grid production capacity during this period.
“Silika (industrial development) as a national program will only receive budgetary allocations in 2024,” Vivik Pudjiastuti, director of the Ministry of Industry, told The Jakarta Post.
The roadmap will cover six strategic aspects, namely an overview of Indonesia's resources, stakeholders involved, existing and required production technologies, policies, human capital and market potential at home and abroad.
Silicon is the raw material for silicon wafers, and the latter are the main components of semiconductor chips as well as photovoltaic modules, commonly known as solar panels, meaning its processing can serve two different manufacturing industries. .
According to the Ministry of Energy and Mineral Resources as of 2021, Indonesia has quartz sand reserves of about 330 million tons, with a much larger resource potential of 2.1 billion tons.
Vivic explained that this number could change in future surveys.
However, a single source does not represent a significant competitive advantage since silica can be found almost anywhere.
Therefore, the government cannot rely on it to attract investment. Tawheed Ahmad, executive director of the Institute of Economic Development and Finance, said Indonesia's only remaining argument is the strength of its domestic market, assuming there is demand for silicon wafers.
“If it is purely export, I think it will be difficult,” Tawhid told the Post on Monday. Creating a market for silicon wafers will be part of the government's roadmap, Vivic said.
The obvious buyers for solar panels are state-owned PLN and private companies betting on Indonesia's energy transition, while semiconductors could be sold to manufacturers such as automakers who are struggling to ensure the safety of critical components due to a global chip shortage.
"It is entirely possible" that Indonesia will attract investment in semiconductors, Tawhid said, especially if the country can offer "very competitive prices."
Meanwhile, Lavina Iyer, an analyst at the Economist Intelligence Unit, told the Post on Tuesday that there is no doubt that there is "foreign investor interest in Indonesia's emerging chip industry," pointing to the Indonesian operations of German group Infineon as a good example. . .
The complexity of semiconductors varies widely, from simple semiconductors for consumer electronics to complex semiconductors for supercomputers or high-tech military equipment. —Jakarta Post/ANN
