HANOI, Jan 11 (Reuters) – Chinese display maker BOE Technology Group Co Ltd (000725.SZ), a supplier to Apple Inc (AAPL.O) and Samsung Electronics Co Ltd (005930.KS), plans to invest a substantial sum to build two factories in Vietnam, said two people familiar with the matter.
The investment could total up to $400 million, one said.
The plan underscores efforts by tech firms led by U.S. iPhone maker Apple and Taiwanese device maker Foxconn to reduce supply chain exposure to China amid trade and geopolitical tensions between Beijing and China. Washington and production disruptions caused by COVID-19 containment measures in China.
BOE is in talks to lease tens of hectares of land in northern Vietnam to add to its relatively small factory in the south which mainly supplies TV screens to South Koreans Samsung and LG Electronics Inc (066570.KS), the people said, declining to be identified as negotiations were confidential.
BOE declined to comment.
Northern Vietnam has attracted major investments from electronics giants in recent years, becoming a major hub for the production of smartphones, computers and cameras, including flagships from Apple and Apple. Samsung.
Hon Hai Precision Industry Co Ltd (Foxconn) (2317.TW) and Chinese company Luxshare Precision Industry (002475.SZ) also manufacture or plan to assemble a number of Apple products in the region, such as laptops and computers. tablets.
BOE plans to lease up to 100 hectares and use 20% of it for a factory making remote control systems at a cost of $150 million, one of the people said.
The rest would be for displays, with BOE spending $250 million to build a factory on 50 hectares while suppliers would use the remaining 30 hectares, all by 2025, the person said.
BOE plans to manufacture more sophisticated organic light-emitting diode (OLED) displays at the site rather than liquid crystal displays (LCDs), the person said.
Apple, which included BOE in its 2021 list of manufacturing partners, is using OLED displays for its latest iPhone smartphones.
China’s largest display maker by production is expected to become the largest display supplier for new iPhones by 2024, TF International Securities analyst Kuo Ming-chi said last week.
The US tech giant, however, plans to start manufacturing mobile displays in-house by next year, Bloomberg reported on Wednesday.
Apple declined to comment.
BOE’s Vietnamese plan is not specifically aimed at supplying Apple, the person said.
Client Samsung, the world’s largest smartphone maker, produces half of its handsets in Vietnam while LG has a large operation in the country and plans further investment.
Reporting by Francesco Guarascio; Additional reporting by Josh Horwitz and Phuong Nguyen; Editing by Christopher Cushing
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