Illustration of a semiconductor wafer.
October 31, 2024 — A new report indicates that advancements in China’s electronic display manufacturing sector could pose national security concerns for the United States, as massive subsidies from the CCP might bankrupt foreign competitors, risking U.S. dependence on Chinese products for essential components.
Pamir Consulting, a company that assists businesses and government entities in analyzing China-related risks, will release a report this week titled Displays are the New Batteries.
Joe McReynolds, a co-author of the report, told Reuters that displays are becoming an increasingly important component of computerized military equipment, from fighter jets to augmented reality (AR) devices, which enable soldiers on the battlefield to access layered digital information.
Another co-author, James Mulvenon, noted that the CCP's current display subsidies could push foreign competitors into bankruptcy, making the U.S. dependent on China in times of conflict.
The industry has long been dominated by Japanese manufacturers, and now companies like Samsung Electronics and LG in South Korea lead the production of displays for smartphones, laptops, and other devices.
However, Chinese companies such as BOE Technology Group are also making strides in this sector, establishing business partnerships with companies like Apple.
The report states that China’s development in the display industry is tied to the CCP government’s policies of “investment, cash subsidies, and preferential treatment in loans, land, and infrastructure,” with government subsidies covering 50% to 70% of investment costs.
As of 2024, BOE has become the world’s second-largest display manufacturer, holding a 16% share of the global OLED display market. OLED displays are advanced screens used in high-end smartphones.
“From a strategic perspective, in the field of display production, we can no longer simply let the market function in a natural or predatory way,” Mulvenon told Reuters.
“The next real frontier competition is over who can manufacture the next generation of micro-displays, which has various implications for military and national security applications,” McReynolds said.
A previous report on China’s chip manufacturer SMIC by Mulvenon circulated among U.S. officials, after which SMIC was added to the U.S. trade sanctions list.
Editor: Lin Yan
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