Reports: Chinese Supplier to Apple, Samsung Plans Big Investment in Vietnam

2023-01-12

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  • A Chinese supplier of electronic equipment to both Apple and Samsung plans a big investment in two factories in Vietnam.
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  • Reuters news service spoke to two people who know about the deal.
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  • The reports say BOE Technology Group plans to invest up to $400 million.
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  • The plan suggests that U.S company Apple and Taiwan's Foxconn are trying to make changes to how their parts are supplied.
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  • The changes could mean that some electronic parts production would be moved out of China to Vietnam, as U.S. and other companies try to reduce their dependence on Chinese manufacturers.
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  • Political tensions between China and the United States may have influenced the changes.
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  • Production delays from China's severe COVID-19 measures also may have played a part.
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  • BOE, which is in Beijing, is in talks to pay for the use of land in northern Vietnam.
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  • It also aims to expand its small factories in the south.
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  • Those factories currently supply television screens to South Korea's Samsung and LG Electronics.
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  • That information comes from people who did not want to be identified because the negotiations are secret.
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  • BOE chose not to comment on the issue.
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  • Northern Vietnam has gained notable investments in recent years from electronics companies.
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  • It has become a center for manufacturing smartphones, computers and cameras. That includes products for Apple and Samsung.
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  • Hon Hai Precision Industry, the trading name for Taiwan's Foxconn, and China's Luxshare Precision Industry also make or plan to make laptop and tablet computers there.
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  • One person told Reuters that BOE plans to rent 100 hectares and use 20 percent of it to build a factory for making remote control systems.
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  • The cost would be $150 million.
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  • The rest would be for displays.
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  • The goal is to have the developments in place by 2025.
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  • One person involved said BOE plans to make higher-level technology such as organic light-emitting diode (OLED) screens at the factory.
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  • Apple included BOE on its list of 2021 manufacturing partners.
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  • It uses OLED screens for its latest iPhone smartphones.
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  • Kuo Ming-chi is an expert at TF International Securities, a financial services company in Hong Kong.
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  • He said BOE is China's biggest display maker and aims to become Apple's largest supplier of displays for new iPhones by 2024.
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  • However, Bloomberg news reported recently that Apple plans to start making its own screens by next year.
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  • Apple chose not to provide a comment to Reuters reporters.
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  • But a person involved in the deal said BOE's Vietnam plan is not completely aimed at supplying Apple.
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  • BOE is also a supplier to Samsung, the world's largest smartphone maker.
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  • Samsung currently produces half its smartphones in Vietnam.
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  • LG also has operations in the country and plans new investments.
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  • I'm Mario Ritter Jr.