The U.S. Congress is putting significant pressure on the Pentagon to officially categorize BOE Technology Group, \u00a0China’s largest screen manufacturer\u00a0, as a company with close ties to the \u00a0Chinese military\u00a0. 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 \u00a0manufactured domestically\u00a0.<\/p>\n
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This strategy mirrors what has been already successfully implemented within the \u00a0semiconductor industry\u00a0. 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\u2014an effort to bolster local production. As the Secretary of Commerce, Howard Lutnick, candidly pointed out, “We need to have chips \u00a0and\u00a0 need to have screens. We need these objects to be manufactured in the United States.”<\/p>\n
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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 \u00a0LCD and OLED panels\u00a0 are critical components found in a wide array of \u00a0electronic products\u00a0\u2014from 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.<\/p>\n
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<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\"\/><\/code><\/pre>\n<\/div>\n<\/div><\/div>\n<\/div>\nIn the current geopolitical landscape, it\u2019s 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 \u00a0industrial capacity\u00a0 within U.S. borders must be fortified to offer manufacturers domestically produced \u00a0alternatives\u00a0 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 \u00a0Samsung\u00a0 and \u00a0LG\u00a0, who also produce these vital components.<\/p>\n
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\n\nThe largest shareholder of BOE is a state entity, and 47% of its Chengdu factory is owned by organizations backed by the Chinese state.<\/p>\n<\/p><\/div>\n<\/div>\n
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 \u00a0subsidies\u00a0 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.<\/p>\n
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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 \u00a0BOE’s ties with the Chinese military\u00a0 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 \u00a0“blacklist.”\u00a0<\/p>\n
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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 \u00a0$1.33 billion\u00a0 by 2024. While this figure appears modest against a global market that was valued at over \u00a0$156 billion\u00a0 last year, screens are nevertheless essential components for both \u00a0Chinese and U.S. armed forces\u00a0. The U.S. Department of Defense actively purchases advanced screens and has even allocated funding for the development of \u00a0next-generation display technologies\u00a0.<\/p>\n
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Image | Xataka<\/p>\n
For further insights, you can read Chris Miller’s Newsletter here<\/a>.<\/p>\nIn Xataka | China is gearing up to penetrate the OLED TV market, putting South Korean manufacturers in a precarious position.<\/p>\n