The Indonesian Ministry of Industry has secured a beneficial agreement with Apple following negotiations on the company's investment commitments for the 2023-2029 period.

The deal ensures increased foreign investment, technology transfer, and expanded local production, strengthening Indonesia’s position in the global supply chain.

Minister of Industry Agus Gumiwang Kartasasmita told a press conference on Wednesday, February 26, 2025 that Indonesia has approved Apple’s innovation investment plan for 2025-2028 and signed a Memorandum of Understanding (MoU) covering commitments from 2023 to 2029.

"The negotiations have resulted in an agreement that benefits Indonesia significantly," Agus said.

Apple has opted to continue using the "Scheme 3" model for meeting domestic component level (TKDN) certification requirements, which focuses on innovation investments. The company has fulfilled its previous obligations for the 2020-2023 investment period, amounting to US$10 million.

To address prior unmet commitments, Apple agreed to additional investments, including the establishment of a US$150 million AirTag accessory manufacturing plant in Batam, Riau Islands, in collaboration with ICT Luxshare. This factory will make Indonesia the supplier of 65 percent of the global AirTag market, with locally sourced batteries.

Apple is also setting up a production line at PT Long Harmony Industry in Bandung to manufacture mesh fabric for AirPods Max, further integrating Indonesia into its Global Value Chain (GVC).

In the new negotiation cycle, rather than extending previous terms, Indonesia and Apple agreed to start a fresh investment cycle. Under this agreement, Apple will bring US$160 million in hard cash to fulfill its commitments under Scheme 3.

Additionally, the MoU outlines key initiatives, including:

• Establishing the Apple Software Innovation and Technology Institute

• Setting up the Apple Professional Developer Academy

• Continuing support for the Apple Academy program

The Ministry of Industry estimates that Apple’s innovation programs will generate a US$72.3 million multiplier effect, including US$ 47.3 million from technology transfers at the Apple Academy and US$ 25 million in startup investments from Apple Academy graduates.

Apple is also committed to building a Research & Development (R&D) Center focused on software development. This would be Apple’s first R&D Center in Asia and only the second outside the U.S., after Brazil. The center will collaborate with 15 Indonesian universities, including ITB, UI, UGM, and ITS, as part of the Indonesia Chip Design Collaborative Center (ICDEC).

To oversee the implementation of the MoU, Apple has appointed a third-party monitor, ensuring compliance with the agreed terms. With the agreement finalized, the Ministry of Industry will now proceed with issuing TKDN certification through the National Industrial Information System (SIINas).

"The Ministry of Industry and Apple will work together to develop an Apple Manufacturing Roadmap until 2029, ensuring Indonesia’s growing role in Apple’s supply chain," Agus concluded.