The BOE-supplied OLED display in the iPhone SE (4) is expected to closely resemble that of the iPhone 14 series.
The United States Congress has dispatched a letter to the Department of Defense asserting that China’s subsidies for television production companies pose a national security threat, ultimately aiming to compel Apple to diversify its supply chain.
Apple’s global supply chain relies heavily on various firms to manufacture displays for its iPhones, iPads, and other devices. Despite Chinese display panel manufacturer BOE’s recent challenges in navigating the complex global supply chain, its ability to maintain its market presence may become increasingly difficult.
Representative John Moolenaar (R-MI), Chairman of the House Select Committee on the Chinese Communist Party, wrote a letter to Defense Secretary Lloyd Austin regarding concerns over China’s subsidies for television producers. The letter, released on Tuesday, specifically targets the BOE Expertise Group and Tianma Microelectronics, highlighting the potential for their technology to become a national security risk if left unchecked.
The People’s Republic of China is accused by Moolenaar of engaging in aggressive state-sponsored subsidization of the two primary display technologies: liquid crystal display (LCD) and organic light-emitting diode (OLED) display. These subsidies enable dominant firms to push smaller, unsubsidized companies out of the market, thereby increasing the People’s First Display Companies’ dominance within the trade.
Referring to the two producers, Moolenaar asserts that they are closely tied to the Chinese People’s Liberation Army (PLA) and actively support its objectives. Initially established in 1993 as a naval and security services provider, BOE has operated as a subprime contractor for the PLA, providing support to various PLA suppliers, including HiSense.
The US Department of Defense (DoD) is petitioned by Moolenaar to categorize both China Ocean Engineering Group (COE) and Tianma Microelectronics as security risks, subsequently adding them to the Pentagon’s 1260h list of prohibited defense contractors with Chinese military ties.
Current listings may pose difficulties for well-established corporations as well as their customers. The listing can serve as a mechanism for imposing economic sanctions on these businesses, effectively curtailing their ability to engage in trade with the United States.
If the Department of Defense (DoD) were to comply with the letter’s demands and add BOE to its blacklist, it could potentially create problems within a segment of its supply chain.
If Apple incorporates BOE’s technology at some point in the future, the blacklist inclusion could potentially become a problem. Sanctions could have unintended consequences, potentially impacting imports of certain products into the United States or their inclusion in finished goods intended for the American market.
Despite this, Apple’s reliance on multiple supply chain sources means that any issues can likely be mitigated simply by increasing orders from alternative component suppliers.
Given the existing presence of Samsung and LG as primary suppliers, the company leverages their expertise to drive innovation and quality in its product lines. Given the current order volumes at these two firms, there is a strong likelihood that they will absorb any excess demand from Apple should it decide to reallocate production away from BOE.
