BOE plans $400 mn investment for new factories in Vietnam

Chinese display maker BOE Technology Group, a supplier of both Apple and Samsung Electronics, plans to invest up to $400 million to build two factories in Vietnam, Reuters news report said.
BOE Technology for mobile display
The global smartphone display market is expected to grow at a compound annual growth rate of 5.7 percent over the forecast period to reach a market size of $43.117 billion in 2026 from $29.257 billion in 2019.

The investment plan of BOE Technology underscores efforts by technology firms led by U.S. iPhone maker Apple and Taiwanese device assembler Foxconn to lower supply chain exposure to China amid trade and geopolitical tension between Beijing and Washington and production disruption caused by China’s COVID-19 containment measures.

BOE is in talks to rent dozens of hectares of land in north Vietnam to add to its relatively small plant in the south that supplies mostly television screens to South Korea’s Samsung and LG Electronics.

Northern Vietnam has in recent years attracted significant investment from electronics giants, becoming a major hub for the production of smartphones, computers and cameras, including flagship goods from Apple and Samsung.

Foxconn and China’s Luxshare Precision Industry also make or plan to assemble a number of Apple products in the area such as laptop and tablet computers.

BOE plans to rent up to 100 hectares and use 20 percent for a plant making remote control systems at a cost of $150 million.

The rest would be for displays, with BOE spending $250 million to build a plant on 50 hectares while suppliers would use the remaining 30 hectares, all by 2025.

BOE plans to make the more sophisticated organic light-emitting diodes (OLED) screens at the site rather than liquid-crystal displays (LCDs).

Apple, which included BOE in its 2021 list of manufacturing partners, uses OLED screens for its latest iPhone smartphones.

China’s biggest display maker by output is set to become the largest supplier of displays for new iPhones by 2024, analyst Kuo Ming-chi at TF International Securities forecast last week.

Meanwhile, Bloomberg report said Apple plans to start making mobile screens in-house by next year in an attempt to bring more components in-house.

The company intends to begin by swapping out the display in the highest-end Apple Watches by the end of next year. Apple plans to eventually bring these displays to other devices as well, including the iPhone.

The Cupertino, California-based tech giant is aiming to reduce its reliance on other partners such as Samsung Electronics and LG.

The report added that the screens would upgrade the current OLED standard to a technology called microLED.

Apple also plans to replace Broadcom chips from its devices with an in-house design in 2025.