Apple may face a difficult situation in finding a source of OLED screens for the iPhone SE 4 it is launching next year.
A letter from the US Congress has been sent to the US Department of Defense stating that China's subsidies to display manufacturers could pose a security risk to the country. The ultimate goal could be to force Apple to change its sourcing.
The OLED display on the iPhone SE 4 may not have BOE's footprint.
House Select Committee Chairman John Moolenaar wrote to Secretary of Defense Lloyd Austin in a letter stressing that China is implementing a massive subsidy program for two key display technologies, LCD and OLED. These subsidies not only promote domestic companies but also increase the “dominance” of Chinese companies in the industry.
In the letter, Moolenaar points out that BOE and Tianma have ties to the People's Liberation Army (PLA) as they support its modernization efforts. Among these, Moolenaar specifically notes that BOE, which was founded in 1993 as a military supplier, has served as a subcontractor to the PLA.
For this reason, Moolenaar asked the US government to consider BOE and Tianma as security threats and put the two companies on the US Department of Defense's 1260h Entity List. If implemented, this could lead to sanctions and restrictions on the two Chinese companies' ability to trade with US businesses, including Apple.
The iPhone SE 4 is said to go into production in October.
If BOE is blacklisted, it could cause problems for Apple's display supply chain, especially since the company identified BOE as a potential supplier for the iPhone SE 4 after deeming the asking price from key partner Samsung for the iPhone SE 4's OLED display "too high."
In the context that the iPhone SE 4 is said to have entered mass production in October this year, BOE's sudden "whistle-blowing" could affect Apple's plans to launch this low-cost smartphone to the market early next year.
Of course, Apple could solve this problem by increasing orders from other display suppliers like Samsung Display and LG Display to reduce its dependence on BOE. The problem is, the displays from the two Korean partners are not cheap, which could affect the goal of cutting costs for the next iPhone SE series. As a result, the price of the iPhone SE 4 may increase, at least if Apple wants to maintain profit margins on its cheapest iPhone model.
