Technology

EXCLUSIVE: Apple supplier BOE plans new factories in Vietnam

EXCLUSIVE: Apple supplier BOE plans new factories in Vietnam
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HANOI, January 11 (Reuters) – Chinese display maker BOE Technology Group Co Ltd (000725.SZ)a supplier of Apple Inc. (AAPL.O) and Samsung Electronics Co Ltd (005930.KS)it plans to invest a substantial sum to build two factories in Vietnam, two people familiar with the matter said.

The investment can add up to $400 million, said one of them.

The plan highlights the efforts of technology companies led by the US iPhone maker. Apple and Taiwanese device assembler foxconn to reduce 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.

BOE is in talks to lease tens of hectares of land in northern Vietnam to add to its relatively small plant in the south that mainly supplies TV screens to South Korea’s Samsung and LG Electronics Inc. (066570.KS)the people said, declining to be identified as the negotiations were confidential.

BOE declined to comment.

In recent years, North Vietnam has attracted significant investment from electronics giants, becoming a major hub for the production of smartphones, computers and cameras, including flagship products from Apple and Samsung.

Hon Hai Precision Industry Co Ltd (Foxconn) (2317.TW) and China’s Luxshare precision industry (002475.SZ) Also make or plan to assemble a number of Apple products in the area, such as laptops and tablets.

BOE plans to lease up to 100 acres and use 20% for a plant that makes remote control systems at a cost of $150 million, one of the people said.

The rest would be for shows, with BOE spending $250 million to build a plant on 50 hectares, while vendors would use the remaining 30 hectares, all by 2025, the person said.

BOE plans to manufacture more sophisticated organic light-emitting diode (OLED) displays on site instead of liquid crystal displays (LCDs), the person said.

Apple, which included BOE in its list of 2021 manufacturing partners, uses OLED displays for its latest iPhone smartphones.

China’s biggest display maker by output will become the biggest supplier of displays for new iPhones by 2024, analyst Kuo Ming-chi at TF International Securities predicted 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 Vietnam plan is not specifically aimed at supplying Apple, the person said.

Customer Samsung, the world’s largest smartphone maker, produces half of its phones in Vietnam, while LG has a large operation in the country and is planning new investment.

Reporting by Francesco Guarascio; Additional reporting by Josh Horwitz and Phuong Nguyen; Edited by Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.

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