The U.S. Congress is putting significant pressure on the Pentagon to officially categorize BOE Technology Group, China’s largest screen manufacturer , as a company with close ties to the Chinese military . This is a move that has raised multiple eyebrows in both political and economic circles. As highlighted by Chris Miller, the author of the critically acclaimed book ‘The War of Chips’, the Trump administration is establishing a clear intention: they want the screens utilized by American companies to be manufactured domestically .
This strategy mirrors what has been already successfully implemented within the semiconductor industry . Major players like TSMC, Intel, and Samsung are setting up new manufacturing plants in the U.S. to circumvent tariffs imposed by the previous administration—an effort to bolster local production. As the Secretary of Commerce, Howard Lutnick, candidly pointed out, “We need to have chips and need to have screens. We need these objects to be manufactured in the United States.”
The Strategic Importance of Screens for the U.S. and China
The U.S. government’s forthcoming decisions, focused on restricting dependence on Chinese manufacturers while bolstering local screen production, will likely rest on several fundamental pillars. At the forefront is the reality that LCD and OLED panels are critical components found in a wide array of electronic products —from mobile phones and tablets to televisions, cars, and smartwatches. Notably, BOE serves as a key OLED matrix supplier for Apple, further complicating its standing in the domestic market.
<img alt="Japan prepares its resurgence: in 2030 it plans to overcome the US and China in quantum computing" width="375" height="142" src="https://i.blogs.es/9de710/riken-ap/375_142.jpeg"/>In the current geopolitical landscape, it’s plausible that the Trump administration might impose hefty tariffs on imports of LCD and OLED panels in the short to medium term. However, before such actions are executed, the industrial capacity within U.S. borders must be fortified to offer manufacturers domestically produced alternatives to imported screens. This potential strategy will not just target BOE, TCL, and similar Chinese manufacturers; it will equally impact Japanese and South Korean companies, such as Samsung and LG , who also produce these vital components.
The largest shareholder of BOE is a state entity, and 47% of its Chengdu factory is owned by organizations backed by the Chinese state.
Thus far, BOE has been mentioned multiple times for good reason. The U.S. administration is keeping a close watch on this company. As noted by Chris Miller, BOE is receiving substantial subsidies from the Chinese government, and 47% of its new Chengdu facility is jointly owned by state-backed organizations. This underscores a critical aspect of BOE’s operations and its possible ramifications on U.S.-China relations.
Meanwhile, the South Korean government is also backing its local giants, Samsung and LG, but has never shared such a significant fraction of ownership in their production plants. Miller notes that BOE’s ties with the Chinese military are still a subject of investigation, yet many U.S. congressmen are already convinced that these connections are significant enough to warrant the company’s inclusion in a “blacklist.”
Should this request come to fruition, BOE might find itself barred from the U.S. market much like Huawei and ZTE faced sanctions in the late 2010s. Interestingly, BOE recently reported that global sales of military-use screens are projected to reach $1.33 billion by 2024. While this figure appears modest against a global market that was valued at over $156 billion last year, screens are nevertheless essential components for both Chinese and U.S. armed forces . The U.S. Department of Defense actively purchases advanced screens and has even allocated funding for the development of next-generation display technologies .
Image | Xataka
For further insights, you can read Chris Miller’s Newsletter here.
In Xataka | China is gearing up to penetrate the OLED TV market, putting South Korean manufacturers in a precarious position.