Indonesia Has Upper Hand in Korean Semiconductor Investment Race
Indonesia Has Upper Hand in Korean Semiconductor Investment Race
Jakarta. A South Korean envoy said Tuesday that countries had been pursuing semiconductor deals, although the mineral-rich Indonesia might have the upper hand in the negotiations.
South Korean Ambassador to Indonesia Yoon Soongu revealed that his country had received semiconductor investment proposals from countless countries. However, he signaled that the talks were still at a nascent stage, hence giving Indonesia a chance to prove that it is worth the investment.
“Many foreign partners have approached us to figure out whether we could help their semiconductor industry base. I believe there are no concrete actions or discussions so far,” Yoon Soongu told the Jakarta Globe at the Indonesian Stock Exchange.
The diplomat did not say which country had made their business pitches. Asked whether it is Vietnam, Yoon Soongu only replied that Hanoi had been a magnet for smartphone production, even naming the tech giant Samsung Electronics. He added: “But not that much on Vietnam when it comes to semiconductors”.
Yoon Soongu went on to say that Indonesia actually possesses the building blocks for semiconductor investments. But the actual deal will hinge on whether Jakarta can improve its business climate, including by removing trade barriers.
“You [Indonesia] have a huge market and critical minerals,” Yoon Soongu said.
“The next is the strong government commitment to ensure that the semiconductor industry will flourish here.”
At present, Jakarta has joined forces with the UK’s chip designer Arm to train 15,000 Indonesian engineers. Senior minister Airlangga Hartarto is keeping his fingers crossed that the deal can woo other semiconductor giants, including South Korea’s SK Hynix, into striking a deal.
“We are expecting some investment in the next phase, where we will begin creating next-generation chips. There will be a bigger investment in [chip] printing, which is currently dominated by [Taiwan’s] TSMC, [the US’s] Nvidia, and SK Hynix. Perhaps they will invest in our country,” Airlangga said on the margins of a London visit in February.
Government data showed South Korean investments in Indonesia came in at almost $2 billion in 2025.
South Korean President Lee Jae Myung has recently laid out massive chip investment plans in a bid to revive economies beyond the Seoul metropolitan area. There is also an 800 trillion won (around $516 billion) investment by Samsung Electronics and SK Hynix for a semiconductor complex in the country’s southwestern region.
Indonesia-South Korea trade shrank from $20.1 billion in 2024 to $18 billion the following year, according to official statistics. Both countries have already agreed to eliminate over 95% of their tariff posts as part of a trade agreement.
Read More: S. Korea Asks Indonesia for Tax Incentives on Nickel EVs
Tags: Keywords: