Apple Supplier Pegatron to Invest Up to $1 Billion USD on Indonesian iPhone Chip Factory

Apple supplier Pegatron is planning to invest up to $1 billion USD on a factory in Indonesia that will assemble chips for Apple’s iPhone.

According to a new report from Reuters, Indonesia’s deputy minister today said that the Taiwanese firm has signed a letter of intent stating it plans to invest 10 to 15 trillion rupiahs ($695 million USD to $1 billion) in an Indonesian factory to assemble “chips for Apple’s smartphones.”

Indonesian Deputy Minister Warsito Ignatius said that Pegatron will assemble chips in partnership with local electronics company PT Sat Nusapersada at a factory on the island of Batam.

They will “assemble the chips for Apple smartphones, while the raw components would be imported,” said Ignatius. “The factory might also be used to produce MacBook components as well, but it would not be in the short term.”

Apple Insider, however, notes that it’s unlikely the new factory would produce chips for Apple, as Pegatron is primarily a device assembler, doing as much for the Cupertino company for over a decade. “If the report is accurate,” reads the report, “it isn’t clear what chip manufacture the company would take over.”

Pegatron is just one of a number of major Apple supply chain partners to explore production outside of China recently as many companies look to diversify in the wake of the current U.S.-China trade war.