Application-Specific Integrated Circuit in Indonesia Trends and Forecast
The future of the application-specific integrated circuit market in Indonesia looks promising with opportunities in the telecommunication, industrial, automotive, and consumer electronic markets. The global application-specific integrated circuit market is expected to reach an estimated $21.8 billion by 2031 with a CAGR of 5.7% from 2025 to 2031. The application-specific integrated circuit market in Indonesia is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the rising need for specialized and high-capacity chips and the widespread integration of artificial intelligence and machine learning among industries.
• Lucintel forecasts that, within the product type category, semi-custom will remain the largest segment over the forecast period due to its lower complexity and broad range of applications.
• Within the application category, consumer electronics is expected to witness the highest growth due to the increasing use of application-specific integrated circuits in various gadgets, such as smartphones, tablets, and laptops.
Emerging Trends in the Application-Specific Integrated Circuit Market in Indonesia
The application-specific integrated circuit (ASIC) market in Indonesia is undergoing significant changes due to new trends in various industries. As the country progresses in telecommunications, automotive, and AI, the need for tailored semiconductor products is rising. These changes are also supported by government policies, the development of the digital economy, and modern industrial challenges. Below are five key trends that have played a crucial role in shaping the future of the ASIC market in Indonesia.
• Expansion in 5G and Telecommunications: The ongoing implementation of 5G networks in Indonesia is driving the demand for ASICs. Additional proprietary chips are required to meet the increased speeds and reduce the latency associated with 5G technology. These chips are critical for ensuring optimized data transmission, reliable network performance, and efficient power use. As Indonesia adopts 5G, the demand for telecom-specific ASICs will rise, creating more opportunities for both local and international suppliers.
• Electric Vehicle (EV) Development: The electric vehicle (EV) market in Indonesia is growing, creating a need for specialized ASICs. These chips are essential for effective power management, battery optimization, and energy resource allocation in EVs. As Indonesia moves toward more sustainable energy transportation, the demand for high-performance ASICs for EVs is expected to increase. Manufacturers will have opportunities to develop chips that enhance EV system performance and safety.
• Artificial Intelligence (AI) Integration: High-performance ASICs are critical for the integration of AI across various sectors. Industries like healthcare, finance, and manufacturing are increasingly adopting AI for processing, optimization, and data analysis. The need for customized ASICs capable of performing AI tasks such as neural networks and machine learning processing is growing. AI is reshaping the ASIC market in Indonesia, as it requires semiconductors that are highly efficient and use less power for its applications.
• Industrial Automation and IoT: The automation of industries, along with the rise of IoT, is driving demand for low-power, highly integrated ASICs in Indonesia. Devices in smart homes, smart factories, and other IoT applications rely on energy-efficient and integrated ASICs. As Indonesia progresses digitally, the demand for IoT-specific ASICs will increase. Manufacturers will focus on developing chips that prioritize low power consumption, compactness, and scalability.
• Government Support and Policy Initiatives: The Indonesian government has introduced various incentives and policies to support local semiconductor manufacturing, reducing reliance on imported production. Increased digitalization, smart infrastructure, and green technologies are fostering further investments in the semiconductor industry. Growing policy support is likely to boost the demand for domestically produced ASICs, driving innovation and enhancing Indonesia’s position as a competitive player in the global ASIC market.
In conclusion, the application-specific integrated circuit (ASIC) market in Indonesia is undergoing a transformative phase driven by advancements in 5G, electric vehicles, artificial intelligence, industrial automation, and IoT. These developments, combined with strong government support and policies, are reshaping the semiconductor landscape in the country. As demand for tailored, high-performance ASICs increases across various sectors, Indonesia is poised to become a key player in the global semiconductor market, creating substantial opportunities for both local manufacturers and international suppliers to thrive. The future of Indonesia’s ASIC market looks promising as it continues to evolve with emerging technologies.
Recent Developments in the Application-Specific Integrated Circuit Market in Indonesia
Indonesia’s application-specific integrated circuit (ASIC) market is experiencing notable developments, driven by technological advancements and strategic policy initiatives. The demand for customized chips is growing in sectors such as telecommunications, automotive, healthcare, and IoT. These shifts are further fueled by government efforts to strengthen the semiconductor industry. Below are five key developments that are reshaping the market.
• Telecommunications Infrastructure and the Deployment of 5G: The ongoing expansion of 5G telecom infrastructure in Indonesia is leading to higher investments in telecom-specific chips like ASICs. These chips are crucial for meeting the growing demands for data, improving network efficiency, and streamlining data transfer with lower latency. As Indonesia increases its 5G coverage, the demand for telecom-specific ASICs will continue to grow, offering opportunities for both local and foreign manufacturers to capitalize on the expanding market.
• Electric Vehicle (EV) Market Momentum in Indonesia and Opportunities for the ASIC Industry: Indonesia is becoming a key player in Southeast Asia’s electric vehicle market. The adoption of EVs presents new opportunities for the ASIC industry, particularly for chips designed for battery management and power conversion systems. As the government promotes eco-friendly policies in energy and transportation, more custom ASICs will be developed to enhance the performance and capabilities of EVs. This shift will significantly benefit the industry as Indonesia strengthens its EV infrastructure and vehicle adoption.
• AI and Machine Learning in Key Industries: Artificial intelligence and machine learning are gaining traction in Indonesia’s healthcare, finance, and manufacturing sectors. With the rise of AI, the need for high computational power has increased, creating demand for customized ASICs designed to handle AI workloads. These chips facilitate improved, energy-efficient data processing and advanced algorithms, which are essential for AI applications. The growing adoption of AI across Indonesia’s industries will further drive the need for specialized chips to meet the specific computational needs of various sectors.
• Investment in IoT and Smart Cities: Indonesia’s initiatives in smart cities and IoT are driving the development of IoT devices that require high-performance, low-power ASICs. These devices include smart homes, connected cities, and industrial automation systems. As Indonesia continues to develop its digital infrastructure and automation, the demand for IoT-specific ASICs will increase. Manufacturers will have opportunities to produce low-power, compact, and scalable chips to meet the needs of the expanding IoT and industrial automation sectors.
Innovations in technologies such as 5G, AI, IoT, and electric vehicles are transforming Indonesia’s application-specific integrated circuit (ASIC) market. These advancements, along with strong government support, position Indonesia to become a prominent player in the global semiconductor market. The growing demand for customized chips to meet the unique needs of various industries provides significant opportunities for both local and international manufacturers. These changes will continue to shape the future development of Indonesia’s ASIC market.
Strategic Growth Opportunities for Application-Specific Integrated Circuit Market in Indonesia
The cycling of the telecom and 5G infrastructure system has developed Indonesia’s integrated circuit market for ASIC applications into one of the most booming sectors. Telecom operators have a great need for custom-made high-speed integrated chips, which must be produced to serve as ASICs. These custom ASICs improve the performance of data transmission through the network and save energy. With the implementation and growth of 5G infrastructure, the demand for telecom-specific ASICs will also rise, allowing manufacturers to create new solutions within this developing industry.
• Electric Vehicles (EVs): Indonesia’s emerging electric vehicle market is driving the need for AI-specific integrated circuits (ASICs). EVs need microchips for energy management, battery charging, energy harvesting, and safety functions. There is an increasing focus on sustainable forms of transportation in the country, which will create a greater demand for high-performance ASICs designed for EV systems. Manufacturers will have the opportunity to develop custom ASICs that improve EV efficiency, battery lifespan, and safety measures, enabling greater adoption of electric mobility in Indonesia.
• Artificial Intelligence (AI) and Machine Learning: The growth of artificial intelligence and machine learning in sectors such as healthcare, finance, and manufacturing is opening a wide range of possibilities for the development of AI-specific integrated circuits (ASICs). A considerable amount of powerful chips is needed for a wide range of AI applications. As Indonesian companies continue to embrace AI for automation and data analytics, there will be a tremendous need for high-performance, low-power-consuming ASICs. This presents a great opportunity for manufacturers to design specialized ASICs to support the enormous computational power required by AI-enhanced technologies.
• Industrial Automation and IoT: Growth in IoT adoption and industrial automation is driving the demand for ASIC chips in Indonesia. Smart factories, automated devices, and system developments require efficient, communication-enabled, and data-managed low-power ASICs. IoT-focused ASICs will be needed as digitalization continues to grow in Indonesia. There is an opportunity for manufacturers to build compact, energy-efficient chips that allow for the seamless functioning of interconnected devices and industrial systems.
• Government Support and Policy Initiatives: The government of Indonesia has rolled out several schemes and policies to support the local semiconductor ecosystem, including the development of ASIC fabrication capabilities. Policies supporting the digital economy, green growth, and local content manufacturing are beneficial for the business environment for ASICs. Self-sufficiency and advancement in technology have become long-term goals for the government, creating opportunities for manufacturers due to the increased demand for domestically made ASICs, strengthening Indonesia’s position in the global semiconductor market.
The growth of Indonesia’s silicon market is benefiting from these strategic opportunities in telecommunications, EV, AI, industrial automation, and government policies. There is a high demand for specialized, high-performing chips from all industry players, which creates room for innovation. Indonesia’s ASIC market is bound to expand even more, positioning the country as a competitive player in the global semiconductor market.
Application-Specific Integrated Circuit Market in Indonesia Driver and Challenges
A variety of technological, economic, and regulatory factors are impacting the application-specific integrated circuit (ASIC) market in Indonesia. The electric telecommunication industry, electric vehicles, AI, and industrial automation technologies are all highly competitive and increase the demand for customized chips. On the other hand, infrastructure challenges, supply chain issues, and regulatory restrictions present obstacles. Understanding these drivers and challenges is critical for new players to decide how to strategize and plan for the future.
The factors responsible for driving the application-specific integrated circuit market in Indonesia include:
• Technological Improvements in 5G and Telecommunications: The expansion of 5G infrastructure in Indonesia is one of the major drivers for the ASIC market. Telecom operators need custom-made ASICs for high-speed data, low latency, and high connectivity. As 5G coverage increases, there will be a growing need for telecom ASICs. This will lead to increased investment in the semiconductor markets. The change will also broaden investment in R&D activities for next-generation telecom network-supporting ASICs.
• Surge of Electric Vehicles (EVs): With Indonesia’s recent shift toward green energy and electric vehicles, the need for specialized ASICs will surely increase. For instance, EVs need chips for energy management, battery control, and power optimization that promote high performance, safety, and efficiency. With the government’s push for sustainable transportation, manufacturers now have the opportunity to design specialized ASICs for electric vehicle systems. This is expected to enable the local semiconductor industry and position Indonesia at the forefront of electric vehicles.
• Emergence of Artificial Intelligence (AI) and Machine Learning: The escalating adoption of AI and machine learning technologies in areas such as healthcare, finance, and manufacturing is a key driver for growth in the ASIC market. AI workloads require powerful and efficient chips capable of processing large amounts of data and executing complex algorithms. As AI integration grows across industries in Indonesia, the demand for AI-centric ASICs will increase. This gives manufacturers the opportunity to design specialized, high-performance, low-power ASICs for AI and ML applications. These chips will meet the need for energy-efficient, high-performance computing.
• Industrial Automation and IoT Expansion: The increased integration of industrial automation and IoT in Indonesia is another factor driving demand for ASICs. Smart factories, connected devices, and automation systems rely on low-power, high-performance ASICs to enable data processing and efficient communication. As digitalization grows in Indonesia, the need for customized IoT application-specific ASICs will increase. This development will diversify the manufacturers’ market, allowing them to create more specialized ASICs for IoT and industrial automation applications.
• Government Support and Incentives: The tax breaks and infrastructure expansion provided by the Indonesian government to foster local chip production are key factors driving the growth of the local semiconductor market. The government also supports the development of the digital ecosystem and green industries, which is beneficial for local semiconductor firms. These policy measures are likely to reduce the need for imported chips and boost the domestic chip fabrication industry, making Indonesia an important player in the global semiconductor market.
Challenges in the application-specific integrated circuit market in Indonesia are:
• Supply Chain and Raw Material Constraints: The global semiconductor value chain is being disrupted, which greatly affects the sourcing of raw materials, such as silicon wafers, which are crucial for building ASIC chips. Indonesia is experiencing longer lead times for production, which consequently increases production costs. These supply chain disruptions hamper local firms’ ability to expand and fulfill the increasing demand for ASICs. To mitigate this problem, the industry must strengthen local supply chains and reduce reliance on foreign goods.
• Insufficient Manufacturing Infrastructure for Semiconductors: Indonesia has made advancements in semiconductor design and development but lacks robust infrastructure to manufacture ASICs locally. The country heavily relies on imported chips, making it vulnerable to global supply chain disruptions. To capitalize on market opportunities, Indonesia needs to build domestic semiconductor fabrication plants. This will help reduce reliance on foreign foundries, enable faster production, lower costs, and increase global competitiveness.
• Uncertainty in Policies and Regulations: Despite efforts by the Indonesian government to promote the semiconductor sector, issues persist regarding policy concerns. Problems such as unclear regulations, complicated licensing procedures, and a lack of strong intellectual property protections can obstruct market growth for ASICs. Manufacturers may find it challenging to comply with regulatory requirements, which may slow innovation and dampen competition in the local semiconductor industry. For the ASIC industry to thrive, policies must be clearer and more comprehensive.
Technological developments, such as 5G, electric vehicles, AI, and industrial automation, greatly facilitate the growth of Indonesia’s ASIC market. Strong government support further accelerates growth. However, supply chain issues, limited domestic manufacturing capacity, and regulatory uncertainty could hinder the market’s growth. For Indonesia to establish a strong competitive position in the global ASIC market, it must address these challenges while leveraging growth drivers. As the market develops, both domestic and foreign producers will be able to capitalize on the opportunities provided by these key industries.
List of Application-Specific Integrated Circuit Market in Indonesia Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, application-specific integrated circuit companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the application-specific integrated circuit companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Application-Specific Integrated Circuit Market in Indonesia by Segment
The study includes a forecast for the application-specific integrated circuit market in Indonesia by product type and application.
Application-Specific Integrated Circuit Market in Indonesia by Product Type [Analysis by Value from 2019 to 2031]:
• Full Custom ASIC
• Semi-Custom ASIC
• Programmable ASIC
Application-Specific Integrated Circuit Market in Indonesia by Application [Analysis by Value from 2019 to 2031]:
• Telecommunication
• Industrial
• Automotive
• Consumer Electronics
• Others
Features of the Application-Specific Integrated Circuit Market in Indonesia
Market Size Estimates: Application-specific integrated circuit in Indonesia market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Application-specific integrated circuit in Indonesia market size by product type and application in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different product type and application for the application-specific integrated circuit in Indonesia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the application-specific integrated circuit in Indonesia.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the application-specific integrated circuit market in Indonesia?
Answer: The major drivers for this market are the rising need for specialized and high-capacity chips and the widespread integration of artificial intelligence and machine learning among industries.
Q2. What are the major segments for application-specific integrated circuit market in Indonesia?
Answer: The future of the application-specific integrated circuit market in Indonesia looks promising with opportunities in the telecommunication, industrial, automotive, and consumer electronic markets.
Q3. Which application-specific integrated circuit market segment in Indonesia will be the largest in future?
Answer: Lucintel forecasts that, within the product type category, semi-custom will remain the largest segment over the forecast period due to it’s lower complexity and broad range of applications.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the application-specific integrated circuit market in Indonesia by product type (full custom ASIC, semi-custom ASIC, and programmable ASIC), and application (telecommunication, industrial, automotive, consumer electronics, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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