Apple to invest $1 billion in manufacturing plant in Indonesia

Negotiating with one of the largest companies in the world does not seem easy, but that is precisely what Indonesia has been doing in recent weeks with iPhone maker Apple. The backstory here is that after the country required smartphones sold in the country to be made with at least 40% locally made parts, Indonesia forbidden iPhone 16 sales. In November 2024, authorities even confiscated and destroyed recent iPhone models, as shown in the image above.

Now, Reuters reports that Apple plans to spend $1 billion on its first manufacturing plant in Indonesia. The factory will produce smartphone components and other parts for Apple products.

While the move follows Indonesia’s crackdown on foreign production, it fits a trend as Apple has diversified its supply chain in recent years to reduce dependence on China. For example, the iPhone 16 is currently manufactured in Brazil and Indiaas well as China. Many AirPods models are also assembled in Vietnam.

Personal opinion:

“I think Apple’s decision to invest $1 billion in a factory in Indonesia is a very forward-looking move. It allows it to diversify its production sources and reduce its dependence on China. Indonesia also offers an ideal environment in terms of the availability of young workers and the strong economic growth it is experiencing. While this may help Apple’s production capacity, the challenge remains in maintaining high quality. However, this move may lead to more future investments in new markets.”