Chinese display maker BOE Technology Group Co Ltd (000725.SZ), a supplier of both Samsung Electronics Co Ltd (005930.KS) and Apple Inc (AAPL.O), plans to invest a huge sum to set up two factories in Vietnam, two people with knowledge of the matter said.
The investment may sum up to $400 million, one of them said.
The plan highlights efforts by technology companies led by U.S. iPhone maker Apple and Taiwanese device assembler Foxconn to reduce supply chain exposure to China amid trade and geopolitical tension between Washington and Beijing and production disruption prompted by China’s COVID-19 containment measures.
BOE is holding talks to rent dozens of hectares of land in north Vietnam to add to its relatively small facility in the south that supplies mostly television screens to South Korea’s Samsung and LG Electronics Inc (066570.KS), the people said, requesting to remain unnamed as negotiations were confidential.
BOE Technology would not comment.
Northern Vietnam has in recent years brought in substantial investment from electronics giants, becoming a key hub for the production of computers, smartphones, and cameras, including flagship goods from Samsung and Apple.
China’s Luxshare Precision Industry (002475.SZ) and Hon Hai Precision Industry Co Ltd (Foxconn) (2317.TW) also produce or plan to assemble several Apple products in the area such as laptop and tablet computers.
BOE Technology wants to rent up to 100 hectares and use 20% for a facility manufacturing remote control systems at a cost of $150 million, one of the people said.
Buy Crypto NowThe rest would be for displays, with BOE spending $250 million to set up a plant on 50 hectares while suppliers would use the remaining 30 hectares, all by 2025, the person said. BOE plans to produce the more sophisticated organic light-emitting diodes (OLED) screens at the plant instead of liquid-crystal displays (LCDs), the person said.
Apple, which added BOE Technology to its 2021 list of manufacturing partners, uses OLED screens for its newest iPhone smartphones. China’s largest display maker by output is set to become the biggest supplier of displays for new iPhones by 2024, analyst Kuo Ming-chi at TF International Securities predicted last week.
The U.S. tech giant, however, plans to begin production of mobile screens in-house by 2024, Bloomberg reported on Wednesday.
