Exclusive-Apple supplier BOE plans new factories in Vietnam -sources
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[January 11, 2023] By
Francesco Guarascio
HANOI (Reuters) - Chinese display maker BOE Technology Group Co Ltd, a
supplier of both Apple Inc and Samsung Electronics Co Ltd, plans to
invest a substantial sum to build two factories in Vietnam, two people
familiar with the matter said.
The investment may total up to $400 million, one of them said.
The plan underscores efforts by technology firms led by U.S. iPhone
maker Apple and Taiwanese device assembler Foxconn to lower 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 rent dozens of hectares of land in north Vietnam to
add to its relatively small plant in the south that supplies mostly
television screens to South Korea's Samsung and LG Electronics Inc, the
people said, declining to be identified as negotiations were
confidential.
BOE declined to comment.
Northern Vietnam has in recent years attracted significant investment
from electronics giants, becoming a major hub for the production of
smartphones, computers and cameras, including flagship goods from Apple
and Samsung.
Hon Hai Precision Industry Co Ltd (Foxconn) and China's Luxshare
Precision Industry also make or plan to assemble a number of Apple
products in the area such as laptop and tablet computers.
BOE plans to rent up to 100 hectares and use 20% for a plant making
remote control systems at a cost of $150 million, one of the people
said.
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A customer talks to sales assistants in
an Apple store as Apple Inc's new iPhone 14 models go on sale in
Beijing, China, September 16, 2022. REUTERS/Thomas Peter
The rest would be for displays, with BOE spending $250 million to
build a plant on 50 hectares while suppliers would use the remaining
30 hectares, all by 2025, the person said.
BOE plans to make the more sophisticated organic light-emitting
diodes (OLED) screens at the site rather than liquid-crystal
displays (LCDs), the person said.
Apple, which included BOE in its 2021 list of manufacturing
partners, uses OLED screens for its latest iPhone smartphones.
China's biggest display maker by output is set to become the largest
supplier of displays for new iPhones by 2024, analyst Kuo Ming-chi
at TF International Securities forecast last week.
The U.S. tech giant, however, plans to start making mobile screens
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 handsets 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; Editing by Christopher Cushing)
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