Chinese display manufacturer BOE Technology Group - a supplier to both Samsung and Apple - is reportedly planning to build new factories in Vietnam, according to two anonymous sources who spoke to Reuters.
One of the sources claims that the overall investment may cost around $400 million.
(Photo : STR/AFP via Getty Images)
TO GO WITH China-US-IT-Internet-lifestyle-Apple,FOCUS by Tom Hancock This picture taken on April 22, 2015 shows Chinese workers assembling a cheaper local alternative to the Apple Watch in a factory producing thousands every day in Shenzhen, in southern China's Guangdong province.
Supply Chain Reliance
With trade and geopolitical tensions brewing between China and the US, as well as production disruptions brought on by the former's stringent COVID-19 lockdowns, the plan may indicate Apple and Foxconn's efforts to cut supply chain reliance from China.
One of the sources told Reuters that BOE has joined talks to rent several hectares of land in North Vietnam to expand its plant in the south, which is responsible for supplying television screens and other equipment to South Korea's LG Electronics and Samsung.
However, it is important to note that BOE never confirmed this claim and did not respond to requests from Reuters.
Huge tech companies have made huge investments in Northern Vietnam in the past few years, making it a key location for the production of smartphones, cameras, and other technologies from Apple and Samsung, according to Reuters.
A number of Apple goods, including laptops and tablets, are either produced or will be assembled in the region by Hon Hai Precision Industry Co and China's Luxshare Precision Industry.
One of the sources claims that BOE intends to spend $150 million renting up to 100 hectares, of which 20% will be used for a factory producing remote control systems.
They add that by 2025, BOE would invest $250 million in the construction of a plant on 50 hectares, while suppliers would utilize the remaining 30 hectares for displays.
More Advanced OLEDs
According to the source, BOE intends to manufacture more advanced organic light-emitting diode (OLED) screens at the location instead of liquid crystal displays (LCDs).
Apple uses OLED panels in its most recent iPhone handsets, and BOE was listed among its manufacturing partners until 2021.
By 2024, the leading producer of screens in China, according to output, is expected to overtake Apple as the top supplier of displays for new iPhones, which was predicted by analyst Kuo Ming-chi at TF International Securities last week.
But according to a report by Bloomberg on Tuesday, Jan. 10, the tech giant is planning to start producing its own smartphone screens by next year.
Reuter's source claimed that Apple is not a specific target of BOE's Vietnam supply plan.
Samsung, the biggest smartphone maker in the world and a client of LG, now produces half of its products in Vietnam and is exploring making additional investments there, according to Reuters.
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