Letter from Congress could be first step in forcing Apple to stop using BOE displays

Apple's global supply chain relies on multiple companies to provide displays for its iPhones, iPads, and Macs. However, while Chinese producer BOE has had a troubled existence within the supply chain, its status may become a little tougher to maintain.

John Moolenaar (R-MI), chairman of the House Select Committee on the Chinese Communist Party, has written to Defense Secretary Lloyd Austin about China's subsidization of display producers. The letter, released on Tuesday, takes specific aim at BOE Technology Group and Tianma Microelectronics, and the possibility they could become a national security threat.

In the letter, Moolenaar insists the People's Republic of China (PRC) "engages in aggressive state-sponsored subsidization of the two primary display technologies: liquid crystal display (LCD) and organic light-emitting diode (OLED) display." The subsidies help push other companies not aided by subsidies from the market, and increases the PFCs "dominance in the industry."

Referring to the two manufacturers, Moolenaar goes on to insist they "are tied to the People's Liberation Army (PLA) and support its efforts." It adds that BOE was originally founded in 1993 "as a military and defense supplier," and a subprime contractor for the PLA, it has supplied to other PLA suppliers, including HiSense.

Moolenaar requests that the Pentagon deems both COE and Tianma as a threat, and to place them on the DoD 1260h blacklist as Chinese military companies.

Existing on the list can be troublesome for identified firms, as well as their clients. For example, the list can be used to impose sanctions on the companies, limiting their trading capabilities with the United States.

If the DoD does act on the letter's demand and actually places BOE on the blacklist, it could cause problems for part of its display supply chain.

While BOE has had issues with entering Apple's supply chain, with it limited to small orders of panels over the years, it has been identified as a potential supplier for the iPhone SE 4, though even that is questionable.

The blacklist inclusion could become a problem if Apple uses BOE more in the future. Sanctions could end up affecting imports of some of its products into the United States, or use in finished goods intended for the US market.

However, since Apple uses multiple display sources, it would be a problem that could be countered simply by increasing orders to other component vendors.

It already uses Samsung Display and LG Display as the main two suppliers for its product lines. With the size of existing orders with the two companies, it seems feasible that they could absorb extra orders from Apple if it had to move away from BOE.