According to a new report, Chinese display manufacturer BOE is following the steps of its competitors by constructing new manufacturing facilities in North Vietnam. Some of these facilities will be used to manufacture iPhone displays.
BOE to become Apple’s main display provider in the next few years
Earlier this month, TF Securities analyst Ming-Chi Kuo revealed that BOE defeated Samsung for orders for the forthcoming iPhone 15 and iPhone 15 Plus.
According to a new report from Reuters, BOE plans to invest up to $400 million in settings up two new production facilities in Vietnam.
The plan 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.
Reuters says BOE plans to rent dozens of hectares of land in north Vietnam to add to its relatively small plant in the south that is responsible for supplying television screens to South Korea’s Samsung and LG Electronics
The Chinese firm intends to rent up to 100 hectares of space, 20% of the space will be used for making remote control systems at a cost of $150 million. The majority of the plant would be responsible for producing displays with the company spending $250 million to build a plant on 50 hectares while house suppliers would use the remaining 30 hectares. The plan is on track to be completed by 2025, sources told Reuters.
Although Ming-Chi Kuo has said that BOE is on track to becoming Apple’s leading display supplier in the near future, sources told Reuters that the new production facilities in Vietnam will not be solely dedicated to manufacturing iPhone displays.
The report also notes that Apple’s largest iPhone supplier, Foxconn, is also interested in expanding its existing operations in Vietnam. In 2022, Foxconn signed a $300 million memorandum of understanding with Vietnamese developer Kinh Bac to expand its facility in northern Vietnam.
BOE and Apple have had a tumultuous relationship in recent years. The companies signed a supply agreement in April 2022 for components for the iPhone 14 range. After modifying Apple’s OLED panels’ design by enlarging the thin-film transistor’s circuitry without the Cupertino tech giant’s consent, the manufacturer was soon ordered to stop production of panels for the iPhone 13.
BOE received instructions to start producing iPhone 13 OLED panels again in June 2022. The company had hoped that Apple would also give the go-ahead for the mass production of iPhone 14 OLED panels at the time. It was eventually given permission to start manufacturing the panels in bulk.