Chinese display manufacturer BOE Technology Group Co Ltd, a supplier to both Apple Inc, and Samsung Electronics Co Ltd, intends to make substantial investments to construct two factories in Vietnam. Two people who are familiar with the matter stated that this is a plan.
One of the investors said that it could be worth up to $ 400 million.
This plan is a result of technology companies led by Apple, the U.S. iPhone manufacturer, and Foxconn, a Taiwanese gadget assembler. It reflects efforts to reduce China’s supply chain exposure amid tensions between Beijing and Washington as well as production disruptions caused by China’s COVID-19 containment policies.
BOE has been in negotiations to lease dozens of hectares in northern Vietnam for its small south-facing plant that provides television screens mostly to South Korea’s Samsung Electronics Inc and LG Electronics Inc.
In recent years, significant investments from major electronics companies have been made in Northern Vietnam, which has become a key hub for the production of smartphones and computers, as well as flagship products from Apple and Samsung.
Hon Hai Precision Industry Co Ltd, (Foxconn), and China’s Luxshare Precision Industry, also manufacture or plan to assemble many Apple products in this area.
One person said that BOE intends to lease up to 100 ha and to use 20% to build remote control systems for $150 million.
According to the source, most of the rest will be used for display purposes. BOE would spend $250 million on a 50-hectare plant, while the suppliers would use 30 hectares. This would all take place by 2025.
The person stated that BOE will make more advanced organic light-emitting devices (OLEDs) at the site than it does liquid crystal displays (LCDs).
Apple’s latest iPhone smartphones use OLED screens, as BOE was included in the 2021 list.
According to Kuo Mingchi, an analyst at TF International Securities last week, China will soon be the biggest supplier of new iPhone displays by 2024.
Bloomberg reports that the U.S. tech company plans to make mobile screens internally by next year.
Apple refused to comment.
According to the source, BOE’s Vietnam strategy isn’t geared specifically at Apple.
Samsung is the largest smartphone manufacturer in the world and produces half its handsets here. LG, however, has an extensive operation there and plans to invest more.
