US to Invest & Involve Indonesia in Semiconductor Industry Ecosystem
BUSINESS - Yesterday 06.40
Good news came from Los Angeles, United States. The United States (US) government firmly said that it would disburse investment to Indonesia in supporting the semiconductor industry. Indonesia will be involved in the ecosystem of the super important goods industry that is being hunted by all parties in this world.
The new U.S. commitment was conveyed by Gina Raimondo, U.S. Secretary of Commerce, during a bilateral meeting with Coordinating Minister for the Economy Airlangga Hartarto, Thursday (8/9) LA time.
This bilateral meeting was held on the sidelines of the Indo Pacific Economic Framework (IPEF) Ministerial Meeting at the JW Marriott LA Live Hotel, Los Angeles, which took place September 8-9, 2022.
In this meeting, Coordinating Minister Airlangga was accompanied by Minister of Industry Agus Gumiwang Kartasasmita, Indonesian Ambassador to the U.S. Rosan P Roeslani, Coordinating Minister for Economic Affairs Susiwijono Moegiarso, and Director General of KPAII of the Ministry of Industry Eko SA Cahyanto.
Gina Raimondo's commitment regarding investment in the semiconductor industry is thanks to the support of Indonesia who participated in IPEF. Unmitigated, in participating in IPEF Indonesia follows all pillars consisting of pillars I-IV.
IPEF is an initiative of the United States officially launched by President Joe Biden on May 23, 2022 in Tokyo, Japan.
Pillar I: Trade (Fair & Resilience), Pillar II: Supply Chain (Resilience), Pillar III: Clean Energy, Decarbonization & Infrastructure (Infrastructure, clean energy, and decarbonization), Pillar IV: Taxes and Anti-Corruption. Pillar I will be led by the U.S. Trade Representative (USTR), while II - IV will be led by the US Department of Commerce (DOC).
Raimondo explained that currently the US government has provided federal funds of USD 50 billion (around Rp 747 trillion) to build a semiconductor industry.
From some of these funds, the U.S. will disburse them for investment in Indonesia to support the semiconductor industry ecosystem. So how much is the investment worth? Raimondo has not elaborated on the details, but he asked for this commitment to be followed up by the technical team between the two countries.
"Raimondo proposed that the two countries form a technical team to discuss it immediately. And in October this year, I was invited here to discuss the tangible results of the technical discussions," said Coordinating Minister Airlangga.
One of the things that Indonesia needs to prepare to support the semiconductor industry is human resources (HR). Raimondo said that the capacity building of human resources in the semiconductor field will be carried out through the Master's Degree in Semiconductor and Microelectronics Engineering at the University of Purdue, which can be collaborated with universities in Indonesia.
Against Raimondo's fairly detailed offer, Coordinating Minister Airlangga welcomed it. Airlangga even offered to prepare an Education SEZ (Special Economic Zone) in Batam, to be in line with the Semi-Conductor Industry that already exists in Batam.
Airlangga emphasized the importance of concrete programs that can be realized
(concrete deliverable) to follow up on these commitments. He hopes that this investment commitment will be realized before 2024.
In the semiconductor industry, the U.S. has carried out ecosystem cooperation with other countries, such as Japan, Taiwan, and South Korea.
With the entry of Indonesia into the ecosystem of semiconductor industrial countries, the development of the semiconductor industry in Indonesia will develop rapidly.
Currently, in Indonesia there is already a company from Germany, namely PT Infineon Technologies Batam, which develops semiconductors in Batam.
Another important point of this bilateral meeting, Airlangga said, is the U.S. commitment to invest in the development of the battery industry for electric vehicles (EV batteries) in Indonesia.
"These two industries, both the semiconductor industry and EV batteries, are two industries that the U.S. and Indonesia will be part of the ecosystem," airlangga said.
RI-US Trade Target USD 60 Billion
The bilateral meeting also discussed key developments in the IPEF negotiations and efforts to enhance U.S. cooperation and other investment into Indonesia.
"The bilateral trade volume of the Republic of Indonesia and the US is targeted to reach USD 60 billion, which currently only reaches around USD 37 billion, so there is
an opportunity to further increase cooperation between the two countries," said Airlangga.
At the meeting, Airlangga said that Indonesia has encouraged structural reforms through the omnibus law of the Job Creation Law, Indonesia's strategic position as the G20 Presidency and Chairman of ASEAN in 2023, as well as the need for U.S. support regarding food issues, especially soybean imports (soya bean) from the U.S. which is quite large.
U.S. investment into Indonesia is still very small, where in 2021 it was only USD 2.54 billion or around RP 37.5 trillion, so it needs to be encouraged to invest more U.S. into Indonesia.
Raimondo confirmed the statement, "That is why Indonesia needs to join IPEF and play an active role in every meeting. This is a very good opportunity for Indonesia to increase U.S. trade and investment," Raimondo said.
Regarding the issue of Manpower which is included in Pillar I, Coordinating Minister Airlangga explained about the policies carried out by the Government of Indonesia through the Pre-Employment Card program which is the Government's assistance to improve skills and support for the workforce in order to increase competence and get a job or entrepreneurship.
The Pre-Employment Card Program is a digital
end-to-end program and
Government to People (G-to-P) program, which has been attended by 11.6 million participants and more than 110 million registrants carried out digitally.
Raimondo was very impressed with the success of the Pre-Employment Card program. "The Government's investment in human resources will greatly help Indonesia's economic growth and future," said Raimondo. He also reiterated his commitment to encouraging major American companies to invest in Indonesia.