Pegatron eyes up to $1 billion Indonesia investment to assemble Apple phone chips: deputy minister

An Apple Store employee walks past an illustration of iPhones at the new Apple Carnegie Library during the grand opening and media preview in Washington, U.S., May 9, 2019. REUTERS/Clodagh Kilcoyne

JAKARTA (Reuters) - Taiwan’s Pegatron has signed a letter of intent stating it intends to invest 10-15 trillion rupiah ($695 million to $1 billion) in an Indonesian factory to assemble “chips for Apple smartphones”, Indonesia’s deputy industry minister said on Tuesday.

Pegatron plans to assemble the phone chips in partnership with Indonesian electronics company PT Sat Nusapersada at a factory on the island of Batam, Deputy Minister Warsito Ignatius told Reuters.

He had earlier said it would produce chips but later clarified by text message that the factory would “assemble the chips for Apple smartphones, while the raw components would be imported.”

“The factory might also be used to produce MacBook components as well, but it would not be in the short term,” Ignatius said.

Pegatron declined to comment. Pt Sat Nusapersada and Apple did not respond to requests for immediate comment.

Pegatron is already preparing to start manufacturing home appliances in partnership Sat Nusapersada at Batam’s Batamindo Industrial Park, a park executive told Reuters this month.

Pegatron has not traditionally made chips for smartphones.

Reporting by Cindy Silviana; editing by Tom Hogue and Jason Neely