Indonesia's Strategic Opportunity to Enter Global Semiconductor Technology Ecosystem

President Prabowo Subianto witnessed the signing of a framework agreement between Indonesia’s Investment Management Agency (BPI Danantara Indonesia) and global technology company ARM Limited in London on 23 February 2026. The collaboration with the British chip design giant is widely regarded as a crucial opportunity to strengthen Indonesia’s national technological capacity and enable the country to enter the global high-technology ecosystem, which has long been dominated by developed nations.

“The collaboration with ARM should be understood as a gateway for Indonesia to accelerate semiconductor technology transfer. This is not merely a technology investment, but an opportunity to build national engineering capacity in chip design,” explained Azka Aufary Ramli, Chairman of HIPPI Jakarta Selatan, the Indonesian hardware and semiconductor association.

According to Azka, Indonesia should not rush to establish fabrication plants requiring vast capital expenditure. Instead, the most strategic approach is to begin with chip design centres and talent development, given that ARM processor architecture forms the foundation for 99% of smartphones worldwide and artificial intelligence technology.

“Indonesia does not need to immediately build wafer fabrication plants worth tens of billions of dollars. Many countries have started with chip design centres and semiconductor talent development. Collaboration with ARM can be a very strategic initial step,” Azka explained.

Azka emphasised the importance of genuine knowledge transfer commitments, not merely technology licensing arrangements. He advocated for concrete measures including establishing a national chip design centre and fostering research collaboration between global industry players and Indonesian universities.

“If this collaboration can deliver concrete knowledge transfer, Indonesia has the potential to become a semiconductor talent development centre in Southeast Asia within one to two decades,” Azka stated.

The restructuring of global supply chains resulting from current geopolitical dynamics provides Indonesia with an opportunity to assume a strategic role in Southeast Asia. Through this partnership, Indonesia is expected to compete effectively with neighbouring countries such as Malaysia and Vietnam, which have already entered the semiconductor industry value chain.