Apple’s AirTags are no iPhones — that’s the message Indonesia has for Apple. But a manufacturing facility for the tracking devices on Batam Island could still be a win for workers and local suppliers.
The Cupertino, California tech giant will partner with Chinese manufacturer Luxshare-ICT to set up the facility in Batam, an industrial area just an hour away by ferry from Singapore.
Production is expected to start in 2026, says Investment Minister Rosan Roeslani. According to local media reports, Roeslani claims that the plant may be able to meet 65% of global AirTag demand and will likely create 2,000 jobs.
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Not enough
The facility is part of Apple’s $1 billion commitment to Indonesia — it’s hoping for a license to sell its iPhones in the country of 285 million people.
It’s counting on the AirTag factory to gain the approval of local authorities after failing to meet local investment regulations, but Indonesia seems unimpressed.
Industry Minister Agus Gumiwang Kartasasmita says that AirTags, which are used to keep track of personal items, pets and even vehicles, are an accessory and not an essential component.
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Going local?
Luxshare-ICT, also known as Luxshare Precision Industry, is one of Apple’s key suppliers, especially for devices like AirPods.
It has manufacturing lines in China, Vietnam and India, and is making its first push into Indonesia.
The company, which competes with Foxconn and Pegatron, acquired Winstron’s Apple-related business in 2020, cementing its relationship with the tech giant. Shares of the Shenzhen-listed company have risen by 24% in the past year.
While Luxshare-ICT has a history of working with local suppliers, Nailul Huda, director of digital economy at think tank Celios, says that more imported raw materials might be used in the factory in the Batam Free Trade Zone due to its tax exemptions.
It’s also difficult to meet demand for raw materials when they are not readily available domestically, she says.
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Ariastuty Sirait, a spokesperson for the Batam Free Trade Zone Authority, tells MONIIFY that Apple and its partner have yet to contact local authorities about the factory.
Edited by Victor Loh. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
