A new report highlights that China’s progress in the field of electronic displays could pose national security concerns for the United States. The report suggests that the massive subsidies provided by the Chinese Communist Party could lead to the bankruptcy of foreign competitors, thereby risking U.S. reliance on Chinese products for critical components.
Pamir Consulting is set to release a report titled “Displays are the New Batteries” this week. The company specializes in analyzing China-related risks for businesses and governmental entities.
Co-author of the report, Joe McReynolds, told Reuters that displays are increasingly essential in computerized military equipment, ranging from fighter jets to augmented reality (AR) devices, helping soldiers obtain overlaid digital information on the battlefield.
Another co-author, James Mulvenon, stated that the current display subsidies by the Chinese government could drive foreign competitors out of business and force the U.S. to depend on China during conflicts.
While the industry has historically been dominated by Japanese manufacturers and is currently led by Korean companies like Samsung and LG for producing displays for smartphones, laptops, and other devices. Chinese companies such as BOE have also made advancements in the industry and established business dealings with companies like Apple.
The report attributes China’s advancements in the display industry to the government’s policies of “investment, cash subsidies, and preferential treatment in loans, land, and infrastructure,” with 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 in the global OLED display market. OLED displays are advanced displays used in high-end smartphones.
“From a strategic perspective, in the display production sector, we can no longer simply allow the market to operate naturally and exploitatively,” Mulvenon told Reuters.
“The next real frontier competition lies in who can manufacture the next generation of micro-displays, which has various implications for military and national security applications,” McReynolds added.
Mulvenon previously authored a report on the Chinese chip manufacturer SMIC, which circulated among U.S. officials and led to the company’s inclusion in the U.S. trade sanctions list.