draft calculation formula for value of...

DRAFT CALCULATION FORMULA FOR VALUE OF DOMESTIC COMPONENT

LEVEL CELLULAR PHONE and BASE STATION

I. DOMESTIC COMPONENT LEVEL (TKDN) - HARDWARE

A. DOMESTIC COMPONENT LEVEL Roadmap - Hardware

2015

12% - 15%

2016

??? %

2017

??? %

2018

??? %

2019

??? %

SKD SKD SKD SKD SKD

Testing and QC Testing and QC Testing and QC Testing and QC Testing and QC

Packing Packing Packing Packing Packing

Casing (Plastic) Casing (Plastic) Casing (Plastic) Casing (Plastic)

Injection Injection Injection Injection

Metal Stamping Metal Stamping Metal Stamping Metal Stamping

Battery Battery Battery

Molding Molding Molding

Casing Casing Casing

Accessories Accessories

peripherals

DOMESTIC COMPONENT LEVEL for Hardware is calculated for each

type of product or batch of product type produced with the

manufacture process and raw materials.

The value of DOMESTIC COMPONENT LEVEL for Hardware is

calculated by comparison of finished products less the price

of foreign components with finished products which is the

production cost of the goods.

Production costs include:

1. Direct material costs

2. Direct Labor cost

3. Factory overhead

B. Definitions and conditions

1. Direct material cost

This cost is valued on the amount of material cost

incurred to produce 1 (one) product unit. For direct

material (raw materials), it is valued with the

specifications, material unit, country of origin,

supplier, total usage and material purchase price.

2. Direct Labor Cost

This cost is valued on the amount of cost incurred for

labors to modify direct materials into half-finished

goods or finished product to produce 1 (one) product

unit. For Direct Labor cost, it is valued with the

title, qualifications, nationality, quantity, employment

allocation and monthly salary.

3. Factory Overhead

This cost is valued on the indirect labor cost,

machineries/working equipment /facility and other

manufacture costs to produce 1 (one) product unit the

cost of which is not directly imposed o particular

products.

Indirect cost of Machineries/working equipment, it is

valued along with the certificate/proof of ownership,

name of machine, specifications, quantity, machine

quantity, allocation and depreciation or rent.

Factory Overhead which includes indirect Labor, it is

valued along with the title, qualifications,

nationality, quantity, employment allocation and

monthly salary

Factory Overhead which includes services, it is

valued together with the supplier, handling fee and

allocation of use.

C. Recapitulation Format of Domestic Component Level Value for

Hardware

Description

Cost per 1 (one) product unit %

Domestic

Component

Level

KDN KLN Total

I. Direct material (raw material) (IA) (IB) (IC) (ID)

II. Direct Labor Cost (2A) (2B) (2C) (2D)

III. Factory Overhead (3A) (3B) (3C) (3D)

Production cost (4A) (4B) (4C) (4D)

Note:

Domestic Component Cost (KDN) is defined as the cost of

foreign direct materials, Labor and Factory Overhead.

Foreign Component Cost (KLN) is defined as the cost of

foreign direct material (raw material), direct labor and

Factory Overhead.

Calculation formula:

% DOMESTIC COMPONENT

LEVEL (40) =

Total Production cost (4C) - Foreign Component

Production Cost (4B) x 100%

Total Production cost (4C)

% DOMESTIC COMPONENT

LEVEL (40) =

Production cost KON (4A) x 100%

Total Production cost (4C)

* DOMESTIC COMPONENT LEVEL for Hardware is calculated by

the formula applied to Manufacture Domestic Component

Level set forth in the Ministerial Regulation 16/M-

IND/PER/2/2011.

II. DOMESTIC COMPONENT LEVEL (SOFTWARE)

A. DOMESTIC COMPONENT LEVEL ROADMAP - SOFTWARE

2015 2016 2017 2018 2019

5% - 10% ??? % ??? % ??? % ??? %

Software Software Software Software Software

Testing Testing Testing Testing Testing

Software Software Software Software Software

Customizing Customizing Customizing Customizing Customizing

and Compiling and Compiling and Compiling and Compiling and Compiling

User Interface User Interface User Interface User Interface User Interface

ID Design ID Design ID Design ID Design

MD Design MD Design MD Design

PCB Design PCB Design

Antenna Design

DOMESTIC COMPONENT LEVEL for Software is calculated on

the stages of development process by a manufacturer.

Each state is weighted and the weight assessment is

identified by the number and activities of Labor (SDM)

involved in the stage of process.

Some processes will subsequently be sub-divided into

several primary activities, where each activity will

contribute to the calculation of weight.

B. Weight Calculation of DOMESTIC COMPONENT LEVEL

1. License 10%

2. Software (Firmware) 40%

OS Development 20%

Man Machine Interface 10%

Application 5%

Testing & Debugging 5%

3. Industrial Design 20%

Industrial Design (ID/Product Design) 10%

Mechanical Design (MD) 10%

4. Layout Design 30%

Schematic Diagram 10%

PCB Layout 10%

PCBA SMT Testing & Calibration 10%

(Jig Test Development)

C. Definition of DOMESTIC COMPONENT LEVEL Calculation

License : A form of contractual agreement

upon which the owner or

proprietor of an intellectual

property, such as trade mark,

patent, copyright, royalty

design and others grants license

or authorizes the other party to

make use of its property for

consideration of payment or

license fee (which may be

certain amount of fee or

royalty). The other party or

licensee will use and produce

the intellectual property for

various purposes and sell them

to the public

OS Development : A set of program managing the

hardware resource and delivering

public services for software

application, operating system

serve as the interconnector

between application program and

hardware

Man Machinery Interface : A computer-based GUI (Graphical

User Interface) interface

software connecting the operator

(user) and the machineries or

facility controlled

Application : A computer program performing

the specific tasks

Testing & Debugging : Test and Assessment on products

integrated with Hardware and

Software. The results are assessed

to identify the correlations

between expectation and fact.

Industrial design : The design, configuration or

composition of lines and colors

or their combination or, 3 or 2

dimension creating aesthetic

impression and optimizing the

function and value applied to

manufacture a product.

Mechanical Design : Mechanical design of manufacture

process of a product

Schematic Design : A schematic design generally

showing the process flow of

components.

PCB Layout : Efficient PCB layout for

electronic components to optimize

the design and functions as

required.

PCBA SMT testing & Calibration: Test and Calibration process to

identify accuracy of standard

value on component installation

on PCB.

D. Explanation to Domestic Component Level Weight Calculation

1. License (10%)

a. License means development License using software/

hardware development kit or reference design

released by the main chipset vendor.

b. No License is valued 0%;

c. License sharing with foreign party is valued at 50%;

d. Proprietary License (Local) dinilai100%.

e. Company will be required to submit the proof of

ownership or shared ownership.

2. Software/Firmware (40%)

a. Software Development is observed from each stage of

process and number of local Engineers (engineer,

technician) Local (WNI) involved in the process.

b. The engineers involved may be Local (WNI) or foreign

labors at 1:5 ratio (1 foreign labor accompanied by

a minimum of 5 Local Labors/WNI in the same stage of

process).

c. Capital Goods used for the development are also

observed in the audit process, quantity of Capital

Goods on number of Labor involved.

d. Company will be required to show the activities

relevant to each stage claimed to have local

content, both in the said Company (in Indonesia) or

the third party outsource in Indonesia (showing PO,

Invoice or contract).

Software Development (Firmware) is divided into 4 process:

a. OS Development

Factors related to modification, integration,

customizing, compiling source code driver, kernel,

and/or operating system of smartphone.

No activity related to operating system is valued at

0%;

source code compiling of operating system is valued

at 50%;

Additional activities to compiling including

integration, customizing, modification driver on

operating system is valued at 100%.

b. Man Machine Interface (MMI)

Factors related to development of user interface

development e.g. boot splash, animation, theme,

style, launcher, menu, quick menu setting, shutdown

and others related to user interface.

No activity related to MMI development is valued at 0%;

MMI development is value at 50%;

Activities related to MMI is value at 100%.

c. Application 5%

Factors related to application development running on

operating system platform applied to telematic

devices manufactured.

Factors related to integration process of application

into operating system platform applied.

No activity related to application development and

integration of application to operating system

platform is valued at 0%;

Development and integration of application to

operating system platform is valued at 100%.

Application development may be assigned for domestic

outsource by showing the proof of purchase of

application from such third party.

d. Testing & Debugging 5%

Factors related to software testing and debugging

(firmware) applied to devices produced.

No activity related to software testing & debugging

(firmware) is valued at 0%;

Activity related to software testing & debugging

(firmware) is valued at 100%.

3. Industrial Design (20%)

a. Industrial Design is observed from the stage of

process and designers or engineer Local (WNI)

involved in the process.

b. Designers may be employed from Local or Foreign

Labors at 1:3 ratio (1 Local Labors must be

accompanies by a minimum of 3 Local Labors/WNI in

the same process).

c. Capital Goods (capital goods) used in the design

stage are also taken into account in the audit and

conformance to the quantity of Capital Goods to

number of Labor involved.

d. Company will be required to show activities relevant

to each stage with Local content, both in local

Company or outsource by third party in Indonesia

(PO, Invoice or contract).

Industrial Design (ID/Product Design)

a. Factors related to casing design of the products to

be manufactured.

b. No activity related to casing design is valued at 0%;

c. Activity related to product casing design is valued

at 100%.

Mechanical Design (MD)

a. Factors related to casing design of product to be

manufactured.

b. No activity related to casing frame design is valued

at 0%;

c. Activity related to casing internal frame of product

is valued at 100%.

4. Layout Design (30%)

Schematic Diagram

Factors related to circuit diagram of the product to

be manufactured.

No activity related to design of product circuit

diagram is valued at 0%;

Activity related to design of circuit diagram of

product is valued at 100%.

PCB Layout

Factors related to design of Printed Circuit Board of

the circuit diagram of product to be manufactured.

No activity related to PCB layout design of product

is valued at 0%;

Activity related to PCB layout design of product is

valued at 100%.

PCBA SMT Testing & Calibration & Jig Test Development

Factors related to test and calibration of PCB

Assembly and development of Jig Test (optional)

No activity related to PCBA test and calibration of

product is valued at 0%;

Activity related to PCBA test and calibration of

product is valued at 100%.

DRAFT RECAPITULATION FORMAT

Software Category

No DOMESTIC COMPONENT

LEVEL FACTORS CRITERIA WEIGHT

DOMESTIC

COMPONENT

LEVEL Maximum

Value (%)

1

License (Chipset Use

License)

Yes Domestic Supplier 100%

10%

10%

2,00%

Supplier LN 0% 0%

Domestic + Foreign

Partnership

50% 5%

N/A - 0% 0%

2 Firmware :

- OS Development (Software)

Yes Proprietary (DN) 100%

20%

20,0%

4,00%

Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 10,0%

N/A - 0% 0,0%

- Man Machine Interface

(Software)


10%

10,0%

2,00%

Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 5,0%

N/A - 0% 0%

- Application (software)


5%

5,0%

1,00%

Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 2,5%

N/A - 0% 0,0%

- Testing & Debugging

(Testing Machine)


5%

5,0%

1,00%

Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 2,5%

N/A - 0% 0,0%

3

Industrial Design (ID & MD)


20%

20,0%

4,00% Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 10,0%

No DOMESTIC COMPONENT

LEVEL FACTORS CRITERIA WEIGHT

DOMESTIC

COMPONENT

LEVEL Maximum

Value (%)

N/A - 0% 0,0%

4 Schematic Design

Schematic design


10%

10,0%

2,00%

Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 5,0%

N/A - 0% 0,0%

- PCBA Layout


10%

10,0%

2,00%

Company LN 0% 0,0%

Domestic + Foreign

Partnership

50% 5,0%

N/A - 0% 0,0%

Proprietary (DN) 100% 10,0%

- PCBA SMT (Testing &

Calibration Software)

Yes Company LN 0%

10%

0,0%

2,00% Domestic + Foreign

Partnership

50% 5,0%

N/A - 0% 0,0%

QUANTITY 100% 20,00%

DOMESTIC COMPONENT LEVEL CALCULATION MODEL

Minimum Software Development & Proprietary License

Company PT. Design House Indonesia

Design House Supplier DOMESTIC

COMPONENT

LEVEL

License License (Chipset

License)

10 % Local 100 % 10.00 %

Firmware OS Development

(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %

Industrial Design Own Design (ID) 10 % Local 0 % 0.00 %

Mechanical

Design (MD) -

Internal Casing

Frame

10 % Local 0 % 0.00 %

Layout Design Schematic Design 10 % Local 0 % 0.00 %

PCBA Layout 10 % Local 0 % 0.00 %

PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %


Minimum Software & Shared License Development



COMPONENT

LEVEL


License)

10 % Local 100 % 10.00 %


(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %


Mechanical

Design (MD) -

Internal Casing

Frame

10 % Local 0 % 0.00 %



PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %

Company PT. EMS


COMPONENT

LEVEL


License)

10 % Local 100 % 10.00 %


(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %


Mechanical

Design (MD) -

Internal Casing

Frame

10 % Local 0 % 0.00 %



PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %

Total DOMESTIC

COMPONENT

100% 7.00 %

LEVEL Software

Material BOM

Firmware Import Duty

VAT

Income Tax

Labor Operator

Supervisor

Overhead Building

Machineries

Electricity

Land and Building

Tax

Total Domestic

Component Level

(Hardware)

Total Domestic

Component Level


Product Design & Minimum SW Development



COMPONENT

LEVEL


License)

10 % Local 100 % 10.00 %


(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %


Mechanical

Design (MD) -

Internal Casing

Frame

10 % Local 0 % 0.00 %



PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %

Company PT EMS


COMPONENT

LEVEL


License)

10 % Local 100 % 10.00 %


(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %


Mechanical 10 % Local 0 % 0.00 %

Design (MD) -

Internal Casing

Frame



PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %

Total DOMESTIC

COMPONENT

LEVEL Software

100% 7.00 %


Full Development & CKD & Local Casing



COMPONENT

LEVEL


License)

10 % Local 100 % 10.00 %


(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %


Mechanical

Design (MD) -

Internal Casing

Frame

10 % Local 0 % 0.00 %



PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %

Company PT EMS


COMPONENT

LEVEL


License)

10 % Local 100 % 10.00 %


(Software)

20 % Local 50 % 10.00 %

Man Machine

Interface

(Software)

10 % Local 50 % 5.00 %

Application

(Software)

5 % Local 100 % 5.00 %

Testing and

Debugging

(Testing Machine)

5 % Local 100 % 5.00 %


Mechanical 10 % Local 0 % 0.00 %

Design (MD) -

Internal Casing

Frame



PCBA SMT

(Testing and

Calibration

Software)

10 % Local 0 % 0.00 %

Total DOMESTIC

COMPONENT

LEVEL Software

100% 7.00 %

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