World Chip Crisis! Indonesia Turns Out To Be A Global Chip Exporter Worth USD 135 Million In 1985

JAKARTA - The Director-General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) of the Ministry of Industry, Taufiek Bawazier, said that Indonesia was once one of the world's strongest countries in the semiconductor (chip) industry. In fact, he said that the Republic of Indonesia's ability to produce chips could meet the growing global demand at that time.

According to Taufiek, the peak of the independence of the Indonesian chip industry occurred in the mid-1980s. No kidding, the subordinate of the Minister of Industry Agus Gumiwang Kartasasmita revealed that the value of Indonesia's chip trade with a number of countries at that time reached a value of hundreds of millions of US dollars.

"In 1985, Indonesia exported semiconductor products worth USD 135 million", he said in a webinar entitled Indonesian Industry Opportunities Regarding Global Chip Shortage Issues, Tuesday, August 31.

Taufiek added that this favorable situation cannot be separated from the role of foreign investors who invest their capital to build production facilities in the country. Unfortunately, this situation did not last long because the parent entity of the foreign company decided to leave Indonesia.

“We can export because there are companies from the US (United States) here. But unfortunately, in 1986 they moved to another country”, he said.

Taufiek himself explained that the scarcity that led to the current world chip crisis could not be separated from the pandemic condition.

“At the beginning of the COVID-19 pandemic that occurred throughout the world, the downstream electronics industry lowered the demand for chips. Likewise, in the upstream industry, namely the semiconductor industry, production has also drastically reduced. On the other hand, world supply chains experience inequality because currently the world's chip industry is only produced by a few countries, Taiwan, South Korea, the US, China, Japan, Germany, Switzerland, the Netherlands, Singapore, and Malaysia", he said.

“In its development, now many countries are fighting over chips for their production needs. Meanwhile, chip-producing countries protect themselves because they are high-tech, and have their own political bargaining power. This is the condition that drives the current shortage of chips”, concluded the Director-General of ILMATE Taufiek Bawazier.