Comment by Jim Campbell
July 22, 2018
China has been an intellectual property thief for far too long.
There doesn’t seem to be much that the U.S. can do about it.
Apple appears to be on its own.
Can you say “balance of trade deficit with China”
While Trump’s tactics may not be great in the area of tariffs this is a real underlying issue that threatens the long-term economic prosperity of the United States.
Trump’s plans are temporary and currently on hold, until the world determines the worth of the China’s yuan or renminbi.
Meanwhile, China continues to manipulate its currency. (Source)
China’s currency continues to fall, how low will it go? (Source)
A crystal ball won’t help out with our mutual plight.
The Wall Street Journal
July, 22, 2018
If BOE succeeds, it would not only prove its manufacturing prowess but also score a win for China in its tech race against South Korea and Japan.
BOE is an approved sales certificate to do business with the United States.
Photo: Qilai Shen/Bloomberg News
CHENGDU, China—China’s campaign to become a global power in advanced manufacturing is playing out at a high-tech factory in Sichuan province, where engineers are aiming to supply display screens for Apple Inc.’s AAPL -0.23% top-tier iPhones.
BOE Technology Group Co. plants already make display screens for Apple’s iPads and MacBook computers, and the company is also the world’s top producer of large liquid crystal screens.
Now it is seeking to supply Apple with advanced organic light-emitting diode, or OLED, smart phone screens, according to people familiar with the plans.
If it succeeds, BOE will not only prove its manufacturing prowess with a technically challenging product, but also will score a big win for China in its race to catch up to South Korea and Japan in advanced display-screen manufacturing.
“Many years ago, people were saying that no, the China guys can’t do it. But I think BOE makes a good example,” said David Hsieh, senior director of display research at IHS Markit, a data-analytics company.
BOE, hardly a household name in the U.S., has advanced quickly in the display industry. It became the No. 1 supplier of large LCD screens last year, up from No. 5 in 2014, according to IHS Markit.
It is the only Chinese display company that supplies Apple, which is notoriously finicky in its demands for top-quality components.
But LCD screens are easier to mass-produce than flexible OLED displays, which involve applying tiny organic materials.
Even Samsung Electronics Co. , an OLED pioneer and Apple’s primary display provider, has struggled with a high rate of castoffs.
For Apple, landing BOE as an OLED display supplier provides it with an alternative to Samsung, which Apple competes with in smartphones but relies on for the OLED screens. Apple is keen to diversify its suppliers to minimize production risks and ensure price competition, industry analysts say.
Buying display screens from BOE, which is controlled by the Beijing city government and whose biggest shareholders are state-linked companies, could help Apple stay in China’s good graces—as long as BOE can meet Apple’s high bar for quality.
“It would be seen favorably by Chinese policy makers if Apple puts a stamp of good quality for China’s own technology of suppliers,” said Dan Wang, a technology analyst at Gavekal Dragonomics.
Apple declined to comment.
China’s industrial policies are one of the factors driving U.S.-China trade tensions, with the White House saying they give Chinese companies unfair advantages.
Photo: BOE Technology
BOE’s rapid rise is in part a reflection of those policies, including government financial support for favored industries. But BOE has also grown by tapping foreign talent and a growing pool of competent local engineers.
Please see the entire article below.
At four out of five factories that BOE has recently built or is currently building in China for the cutting-edge displays, local governments contributed most of the initial phase of investment, company filings showed.
IHS’s Mr. Hsieh said government backing helps, but BOE also has talented and aggressive engineers, with a type of commitment he says he has found increasingly difficult to find in the more mature industries of South Korea, Taiwan and Japan.
A case in point is BOE’s approach to Apple.
BOE first knocked on Apple’s doors in about 2011 with hopes of supplying the tech giant with screens, a person familiar with the matter said. It has provided Apple with MacBook displays since 2015 and iPad displays since 2016, the person said.
Apple has been not only a customer but also a teacher to BOE, with its high quality expectations keeping BOE engineers working into late hours. “To improve, one must play chess with the best player,” the person said.
This year, Apple for the first time included BOE on the list of 200 top suppliers it has made public.
Apple began using OLED panels—which are brighter and thinner than traditional panels—in its phones for the first time last year with the release of the iPhone X.
The earliest BOE could supply the OLED screens would be from 2020, one person familiar with the matter said.
For iPhones intended for release later this year, Apple is set to procure screens mainly from Samsung, with a small portion coming from LG Display Co. , people have said.
BOE already is supplying OLED screens to Huawei Technologies Co. for the Chinese smartphone maker’s high-end Mate RS and expects more shipments to several major clients later this year, said Zhang Yu, BOE’s senior vice president, declining to name the clients. Huawei didn’t respond to a request for comment.
Making OLED screens is hard: It involves handling tiny compounds smaller than human hair and applying them in exactly the right spot, or else colors appear distorted on the screen.
Those compounds, which emit red, blue and green colors on the panel, must be applied through a mask with holes 17 to 25 microns big, according to BOE engineer Cui Fuyi. That’s about one-third the width of a human hair.
After months of trials, the current production yield at Chengdu is around 70%, said Mr. Zhang. Industry experts say that is close to a level where a steady mass production would be feasible.
—Yang Jie contributed to this article.
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