Jakarta. Indonesia and the UK-based semiconductor giant Arm are in talks for a $200 million project, according to a senior minister; however, the government still wishes to keep the timeline and technical details a secret.

Sovereign wealth fund Danantara and Arm recently agreed to train 15,000 Indonesian engineers in chip design.

Chief Economic Affairs Minister Airlangga Hartarto revealed on Thursday that Arm was keen on moving to the “next phase”. Negotiations are now underway for a new “special project” that will be separate from the earlier human capital development.

“We are still negotiating [with Arm]. That’s why we can’t disclose it,” Airlangga told reporters in Jakarta.

The cooperation is worth "around $200 million”.

The Jakarta Globe asked Airlangga whether this meant Arm sought to help establish a foundry or semiconductor product manufacturing in Indonesia, something that the minister denied. 

Airlangga described Arm as “the brain that mainly deals with the software side” of semiconductor production. Arm licenses its architecture to other companies for chip development. His response hinted that the upcoming cooperation would be on the design aspect.

Even so, Indonesia had just secured US business deals on foundries, Airlangga said. The economic tsar was alluding to the multi-billion-dollar deals secured by Galang Bumi Industri, which operates an eco-industrial park in the Batam island. The agreements — involving the US-based Tynergy and Essence — revolve around the semiconductor manufacturing processes. Investments related to ingot wafer, wafer slicing, and fabrication are in the pipeline.

Developing a homegrown comprehensive semiconductor ecosystem has long been on Indonesia’s wishlist. 

US semiconductor firm Fairchild used to run an assembly, testing, and packaging facility in Indonesia decades ago. The company decided to relocate to close neighbor Malaysia in the 1980s following Jakarta’s ban on automation to protect labor. Indonesia at the time lacked the domestic capacity to sustain its foothold in the semiconductor industry after Fairchild’s exit, Airlangga said.

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