Global display maker BOE eyes 2 more Vietnam plants

Global display maker BOE eyes 2 more Vietnam plants

By Tuong Nguyen

Wed, January 11, 2023 | 3:24 pm GTM+7

BOE Technology Group Co., one of the world’s largest manufacturers of displays, plans to build two new factories in Vietnam, with substantial investments.

China-based BOE is a supplier of tech giants Apple Inc. and Samsung Electronics, who both have their products made in Vietnam. Especially, more than half of Samsung smartphones are produced in the Southeast Asian country.

As for BOE’s plan for two new plants in Vietnam, Reuters cited Wednesday an insider revealing the investment could reach $400 million.

BOE is in talks to rent dozens of hectares of land in northern Vietnam to add to its relatively small plant in the south, which supplies mostly television screens to Samsung Electronics and LG Electronics, the wire news service reported.

BOE plans to rent up to 100 hectares and use 20% for a plant making remote control systems at a cost of $150 million, another insider was quoted as saying.

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, it was added. But the BOE plan is not specifically aimed at supplying Apple, Reuters heard.

BOE plans to produce the more sophisticated organic light-emitting diodes (OLED) screens at the site rather than liquid-crystal displays (LCDs), according to the source.

BOE’s operational Vietnam plant is located in Nhon Trach II Industrial Park in Dong Nai province bordering Ho Chi Minh City. It started operations in 2019, according to provincial data.

Apple uses OLED screens for its latest iPhone smartphones. Vietnam is emerging as the American giant’s next production hub while other giant electronics makers are accelerating their buildup in the tech-savvy nation to diversify supply chains.

Apple plans to start producing MacBook models in Vietnam for the first time next year, as early as around May. The heavyweight has tapped its supplier Foxconn to make MacBooks in Vietnam. This Apple move means its products made in Vietnam include MacBooks, iPads, AirPods, and Apple Watches.

Foxconn signed a deal in Vietnam in August 2022 to rent an additional 50.5 hectares of land in Quang Chau Industrial Park in Bac Giang province near Hanoi. The Apple supplier plans to develop a new project with an investment estimated at some $300 million but has not disclosed what it would manufacture.

Samsung Electronics, with its $220 million R&D center opening in Hanoi in late December, has elevated the importance of Vietnam as a center for research activities in addition to a manufacturing hub. Samsung is the world’s biggest smartphone maker.

Also Korean, LG Group has a large operation in Vietnam and is planning new investments. LG plans to channel another $4 billion into Vietnam, LG Corp. vice chairman and CEO Kwon Bong-seok told Vietnamese President Nguyen Xuan Phuc on December 5 in Seoul.

LG Group, with LG Corp. being its holding company, has been present in Vietnam since 1995 and invested about $5.3 billion in the country so far to make various products like electronics, cameras, displays, household appliances, and auto components, Bong-seok told the Vietnamese leader.

South Korea’s largest trade surplus in 2022 was with Vietnam, indicating the increasing importance of the Southeast Asian nation as a major manufacturing base. It was the first year Vietnam ranked No. 1 by this measure in part due to major Korean companies establishing factories in the country.

The country’s exports to Vietnam totaled $60.98 billion last year, and imports $26.72 billion, resulting in a surplus of $34.25 billion, South Korea’s Ministry of Trade, Industry and Energy announced earlier this January. Its second-largest trade surplus last year was with the U.S., at $28.04 billion.

https://theinvestor.vn/global-display-maker-boe-eyes-2-more-vietnam-plants-d3282.html