Apple supplier Pegatron plans to invest up to $1 billion in an Indonesian factory to produce chips for Apple smartphones, an Indonesian ministry official said on Tuesday (via Reuters).
The Taiwan manufacturer made the pledge in a signed letter to the Indonesian government, in which it said the chips would be produced in partnership with Indonesian electronics company PT Sat Nusapersada, according to Deputy Minister Warsito Ignatius.
Pegatron expects the investment to come somewhere between $695 million and $1 billion, although the variables influencing the exact amount remained disclosed. In December 2018, Apple was said to be looking to shift production of older iPhones to Pegatron in an effort to avoid losing billions in revenue as a result of its patent dispute with Qualcomm. However, that dispute has since been resolved.
Taiwanese manufacturer Foxconn picked up the majority of orders for Apple’s 2018 iPhones, which may have an influencing factor in declining net profits of nearly 50 percent in the first quarter of 2018 for Pegatron. Apple has also demanded price cuts on components for new iPhone from its overseas suppliers in the last couple of years to maintain its high profit margins, despite a global slowdown in smartphone sales.
According to today’s report, the new Indonesian factory might also be used to produce MacBook components, although that operation “would not be in the short term,” Ignatius told Reuters.
A DigiTimes rumor in May 2018 tipped Pegatron to pick up orders from Apple to produce a MacBook powered by an ARM processor, although the information it was based on may have been misconstrued with the Touch Bar on Apple’s MacBook Pro, which is already powered by an ARM-based T1 chip as a companion processor. Apple said in 2017 that it had no plans for Macs powered solely by ARM chips, rather than Intel processors.
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