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