Jakarta. Indonesia is trying to get some investors to invest in its semiconductor industry, and Jakarta recently took a shot at attracting Dutch investors.

The Dutch top diplomat, Hanke Bruins Slot, visited Jakarta on Tuesday to meet her Indonesian counterpart Retno Marsudi. With the Netherlands being home to a well-developed semiconductor industry, Indonesia took the opportunity to get some potential Dutch investment. According to Retno, the Netherlands is already a major investor in Indonesia. And the archipelagic country wants the Netherlands to further expand its investment into other sectors.

"The Netherlands is the largest investor from Europe contributing more than $15.5 billion since 2013 with a yearly average increase of 15.8 percent," Retno said in a joint press statement after her talks with Bruins Slot.

“Moving forward, Indonesia hopes to strengthen cooperation to develop the semiconductor industrial ecosystem in Indonesia,” Retno said.

Government data shows foreign direct investment (FDI) coming from the Netherlands into Indonesia totaled $856.6 million in Jan-Sep 2023. These investments went into 2,484 projects. Netherlands also became the 8th largest foreign investor over that period, just behind South Korea which invested almost $2 billion. 

A market intelligence report by the New Zealand Foreign Affairs Ministry wrote that Dutch semiconductor companies accounted for approximately 9 percent of the global market share for semiconductors. Dutch semiconductor giants include ASML, NXP Semiconductors, and STMicroelectronics. The largest, ASML, posted 21.2 billion euros (approximately $22.4 billion) in revenue last year.

Not Just Netherlands
In the past, Indonesia had also been pursuing semiconductor investments from other countries. President Joko “Jokowi” Widodo earlier this year went to Germany to attend the Hannover Messe trade fair. Jokowi did not want to come home empty-handed and tried to attract German investors.

“Indonesia is ready to be a partner for semiconductor and electric vehicle [EV] battery production. I hope German businesses would support us to make Indonesia part of the global chip supply chain,” Jokowi said at Hannover Messe in April.

German semiconductor giant Infineon has already invested in Batam, Riau Islands. Its manufacturing plant has been operating since 1996. According to the Industry Ministry, Infineon has pledged to increase investment by 35.37 million euros to bring the weekly production capacity of its Batam plant to 65 million pieces by 2025.

Indonesia is also lobbying with the US. Then State-Owned Enterprise Deputy Minister Rosan Roeslani told news outlet Antara in August that the government had been in talks with the US Department of State on exploring whether Jakarta could be part of the semiconductor chip supply chain. This could help pave the way for the US companies who wish to invest in Indonesia to get some sort of incentives, according to Rosan.

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