Indonesia: Smartphone sales to expand to 40 million units in 2024, Apple to build iPhone supply chain
Indonesia, with the largest population in the Association of Southeast Asian Nations (ASEAN), also leads the region in smartphone sales. According to 2024 data compiled by the US research firm IDC, the country's smartphone shipments have seen growth for the first time in three years, increasing by 15.5% year-on-year to approximately 40 million units. While other ASEAN countries have also experienced positive growth, Indonesia stands out in terms of both size and growth rate.
Recent news revealed that Apple plans to invest a significant amount of $150 million (about 22.5 billion yen) in Indonesia to establish an iPhone supply chain. In relation to iPhone sales in the country, the Indonesian government banned the sale of the iPhone 16 in October last year, citing Apple's failure to meet the 40% local content requirement for domestic sales. Following further negotiations, sales permission was granted on the condition that Apple makes a substantial investment.
Initially, Apple appeared reluctant to develop a local supply chain, as it would entail significant challenges. However, to tap into a massive market with a population of around 300 million, Apple seems to have no choice but to proceed with the investment.
Vietnamese government: Expanded support for semiconductor and AI industry, up to 50% subsidy for new R&D investment
The Vietnamese government has introduced various support measures to attract investments in semiconductors and artificial intelligence (AI). In a recent development, a decree was issued in January this year to subsidize up to half of the initial investment amount for new research and development (R&D) projects related to semiconductors and AI. This move comes in response to multinational companies' reluctance to invest in countries with low tax rates following the implementation of the Global Minimum Tax (GMT*) in 2024. Companies planning to invest 3 trillion VND (approximately 18 billion yen) in R&D in the country and expenditure exceeding 1 trillion VND within three years may receive subsidies covering up to 50% of the initial investment for R&D construction costs, equipment investments, human resource development, and other related expenses.
Additionally, a support program was recently announced for the construction of Vietnam's first semiconductor chip manufacturing plant. Companies aiming to commence production by the end of 2030 will receive subsidies equating to 30% of the total project cost, capped at 10 trillion VND (approximately 58 billion yen). While several companies, predominantly foreign-affiliated, are currently involved in semiconductor post-processing activities like packaging in Vietnam, there is a lack of manufacturers producing semiconductor chips. With the rising global demand for semiconductors, the government has intensified efforts to support the establishment of manufacturing facilities within the country.
Attention on Asian pet food market, India and Thailand are growing rapidly
When it comes to the pet food market, North America and Europe, where many dogs and cats are kept as pets, occupy the top shares, but recently consumption has also increased significantly in India and Southeast Asia. In particular, India, the world's largest population, is expected to have a bright future. According to Mars, a major US pet food company, there are an estimated 100 million pets in India (about 30 million of which are kept at home), and the pet food market is estimated to be about $551 million and is expected to expand to $1.8 billion in the next 7 to 8 years. Mars also says that India is likely to become one of the top five sales markets within the next 10 years.
In Southeast Asia, Thailand is also expected to be a promising market. According to Kasikorn Research Center, a research institute under Kasikornbank, Thailand's pet food market is expected to expand to 46 billion baht (approximately 204 billion yen) in 2025, up 12% from the previous year. Demand is expected to continue to grow sustainably as the number of pets increases. The number of dogs and cats kept is expected to increase at an average annual rate of 19% and 28%, respectively, from 2021 to 2024. In 2025, these numbers are expected to grow to approximately 3.45 million and approximately 1.94 million, respectively (a total of 5.38 million, up 6% from the previous year). Although it is not as large as India, Thailand, with a population of about 70 million, is also growing into an attractive market.
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