[News] China’s Rising Display Industry May Face U.S. Sanctions Due to National Security Concerns

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According to a report from MoneyDJ, citing the Reuters, as Chinese display manufacturers have been actively expanding their production capacity and aggressively capturing market share in recent years, it has raised concerns in the U.S. about potential dependence on China for a critical component in military technologies, posing significant security risks.

The Reuters referenced an upcoming report titled “Displays are the New Batteries,” by author Joe McReynolds, who emphasizes that displays are becoming increasingly crucial in computerized military equipment, including fighter jets and augmented reality systems that enable troops to overlay digital information on their battlefield view.

The Reuters pointed out that China’s subsidies for display manufacturers could drive competitors out of the market, potentially leaving the U.S. reliant on China. As a consequence, the market suggests that China’s display industry will be the next target of U.S. sanctions, as the report from MoneyDJ mentiond.

The rapid growth of China’s display industry is largely driven by significant subsidies from the Chinese government, which include low-interest loans, favorable tax rates, and discounted land purchases. It is estimated that these subsidies cover 50% to 70% of the costs associated with display factories, as the report from the Reuters pointed out.

According to the report from MoneyDJ, China has made significant national efforts to support its display industry, gradually surpassing South Korea, which has long dominated the industry.

Due to intense price competition from China, Samsung Display completely exited the LCD industry in June 2022, while LG Display shut down its South Korean LCD TV production line at the end of 2022, as indicated by the report in MoneyDJ.

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(Photo credit: BOE)