Indonesia and Arm Limited Forge Partnership to Accelerate Semiconductor Industry Development
JAKARTA – Indonesia’s state asset fund, Danantara Indonesia (BPI Danantara), has entered into a framework agreement with Arm Limited, a global leader in semiconductor design, to bolster the nation’s domestic semiconductor capabilities. The signing, witnessed by President Prabowo Subianto during his official visit to the United Kingdom on Monday, February 23, 2026, marks a significant step towards Indonesia’s technological independence and economic diversification.
Strategic Collaboration for Semiconductor Mastery
The partnership aims to accelerate Indonesia’s mastery of semiconductor technology, a critical foundation for modern digital innovations. Coordinating Economy Minister Airlangga Hartarto emphasized the strategic importance of Arm Limited, stating that the company controls approximately 96% of global automotive chip technology and nearly 94% of chip design for data centers and artificial intelligence. Source: IDN Financials
Training and Intellectual Property Development
A key component of the collaboration is a commitment to training 15,000 Indonesian engineers within the Arm ecosystem, equipping them with the skills necessary for chip design technology. Source: Antara News The initiative will focus on developing six national chip designs, concentrating on strategic intellectual property (IP) to be owned by Indonesia. These areas include automotive technology, the Internet of Things, data centers, and home appliances, with potential expansion into autonomous vehicles and quantum computing.
Government Support and Investment
This partnership aligns with President Prabowo’s directive to promote self-reliance in national technology and strengthen Indonesia’s broader food and energy security. Source: Antara News The Indonesian government has already earmarked an initial US$125 million to develop the local chip design industry, including support for the collaboration with Arm. Source: IDN Financials
Historical Context and Future Prospects
Indonesia previously hosted semiconductor plants in the 1970s through partnerships with US firms like Fairchild and National Semiconductor. Yet, a shift in industrial policy led to the relocation of these investments to Malaysia in the mid-1980s. This new partnership with Arm Limited represents a renewed effort to re-establish Indonesia as a key player in the global semiconductor industry.
Expanding Partnerships and Investment
The agreement with Arm Limited is part of a broader push by Jakarta to secure strategic partnerships with global technology firms. Recent agreements signed in Washington, D.C., include semiconductor joint ventures with Essence Global Group (valued at US$4.89 billion) and Tynergy Technology Group (of undisclosed value). Source: ObserverID
Danantara CEO Rosan Perkasa Roeslani stated that the partnership is expected to deliver wide-ranging benefits for industrial development while reinforcing national technological sovereignty. Source: ObserverID