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Apple supplier Pegatron announces it will invest up to $1bn to build iPhone chips in Indonesia

This morning, Pegatron signed a letter of intent to announce that it will invest up to $1 billion dollars to make a factory in Indonesia, via Reuters.

The factory will make chips for Apple smartphones and may make components for MacBooks in the future.

Pegatron is partnering with local electronics firm PT Sat Nusapersada. It is unclear how long it will take for the Pegatron operations to get off the ground.

A Digitimes report previously claimed that Pegatron would make iPads and MacBooks in Indonesia from June.

We have seen major Apple supply chain partners explore production out of China in recent months as companies look to diversify in the wake of the US-China trade war.

Foxconn and Wistron are also expanding iPhone production operations in India at the moment, although this is motivated by the fact that Apple must pay a 30% tariff on imported iPhones. With local manufacturing, Apple can reduce the price of its devices significantly in the region.

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Avatar for Benjamin Mayo Benjamin Mayo

Benjamin develops iOS apps professionally and covers Apple news and rumors for 9to5Mac. Listen to Benjamin, every week, on the Happy Hour podcast. Check out his personal blog. Message Benjamin over email or Twitter.