The fistfight between the United States and China over national security concerns might soon force Apple to ditch ties with one of its Chinese display suppliers. John Moolenaar (R-MI), chairman of the House Select Committee on the Chinese Communist Party, wrote to Defense Secretary Lloyd Austin, warning about Chinese state-subsidized LCD and OLED producers and their risk to US national security.
As the letter states, some Chinese producers like BOE Technology Group and Tianma Microelectronics Co. are subsidized by the CCP and found to have deep connections with the Chinese army, aka People's Liberation Army.
Given the use of LCD and OLED panels in the US weapon systems, Moolenaar is concerned about BOE and Tianma's impact on the US army supply chain, potentially leading to a national security threat. Moolenaar is also asking the Pentagon to identify BOE and Tianna as Chinese military companies and blacklist them.
A part of the Moolenaar's letter reads:
"The PRC engages in aggressive state-sponsored subsidization of the two primary display technologies: liquid crystal display (LCD) and organic light-emitting diode (OLED) display. By doing so, it drives non-PRC companies from the market and bolsters PRC dominance of the industry. In LCD, the industry's legacy technology, the PRC's share of global production capacity has grown from 0% in 2004 to 72% today, and non-PRC manufacturers are rapidly exiting the market due to their inability to compete… A similar evolution is now underway in OLED, the current generation of display technology; the PRC's share of global production capacity has grown from 1% in 2014 to 51% today."
While Samsung and LG supply most of the displays for the latest iPhone models, Apple is said to be in talks with BOE Technology for iPhone SE 4 OLED panels. The Chinese producer reportedly outpriced Samsung, winning the bid to enter Apple's supply chain.
The pressure to shift production to the US has already led Apple and TSMC to start manufacturing A16 processors in Arizona. The looming decision on whether to continue with BOE Technology for the iPhone SE 4 supply chain could have significant implications for Apple's operations. With the phone set to enter mass production in October, Apple could come under immense time pressure to secure an alternative supplier.
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