Electronics Industry

Indonesia’s electronic industry started in the early 1970s from Foreign Direct Investment (FDI) by Japanese and American multi-national companies focusing on production for import-substitutes. Early pioneers include PT. National Panasonic Gobel Indonesia (1954), PT. Toshiba Consumer Electronics Indonesia (1996) and PT. Sharp Yasonta Indonesia (1969).

The Pioneer era of Indonesia’s electronic industry was made up of Original Equipment Assemblies(OEA) for their production line to benefit from Indonesia’s low labor cost. OEA in Indonesia began with Semi Knock-Down system, which installs components to become a TV set.

SKD has a very low added value and improvement were made by upgrading SKD into completely Knock Down, that is the production of PCB board from integrated circuit components, which include soldering and screwing. Sales of the electronic industry should grow from 2004 by an accumulated of 63% in the next 10 years. The reason behind the drive the government’s removal/ reduction of luxury taxes for electronics at the first quarter of year 2003.

Indonesia has a huge potential for electronic growth, particularly for TV market. The rate of ownership of TV sets in households in Indonesia is among the highest when compared to other electronic appliance.