The Michigan congressman who chairs the House Select Committee on the Chinese Communist Party is encouraging the U.S. government to blacklist a pair of giant Chinese display manufacturers over concerns that using display tech from that country for advanced US military systems presents a tangible security and supply chain risk.
Congressman John Moolenaar has sent a formal letter US Secretary of Defense Lloyd Austin expressing what he termed grave concerns about the growing dominance of BOE Technology Group and Tianma Microelectronics in the global display industry. Screens are central to systems from ships to planes to drones and even handheld missile launchers, and most of the LCD and OLED displays that might be integrated with military systems come these days from China, and not Japan or Korea, as in the past.
Moolenaar argues that if trade with China was disrupted because of regional or global tensions, production and supply of displays could be slowed or cut off – with limited Plan B suppliers in place. Moolenaar also argues China’s strategy is to influence global supply chains and impact things like US military readiness. The letter notes how China has grown its share from pretty much nothing 20 year ago to 72% of the global LCD market today, and with OLED industry from 1% 10 years ago to 51% today.
Both BOE and Tianma, he says, have ties to the Chinese military:
Most alarmingly, both companies are tied to the People’s Liberation Army (PLA) and support its efforts. Tianma is identified by the U.S. Department of State as a subsidiary of the Aviation Industry Corporation of China (AVIC).
AVIC, the principal producer of advanced fighter jets for the PLA, is listed on the 1260H List, as well as the NS-CMIC List maintained by the U.S. Department of the Treasury. Five other AVIC affiliates have been designated to the 1260H List, while fourteen other AVIC affiliates have been designated to the NS-CMIC List. Five AVIC affiliates have also been designated to the Commerce Department’s Entity List. Tianma’s absence from all these lists is conspicuous.
BOE was initially founded in 1993 as a military and defense supplier, and it is integrated as at least a subprime contractor for the PLA; many of its customers are known PLA suppliers, such as HiSense.
Moreover, the two companies operate out of a military-civil fusion (MCF) enterprise zone in the PRC. The Chengdu Hi-Tech Industrial Development Zone, located in Sichuan province, houses both a $8.8 billion OLED production line for BOE and the production facilities for one of Tianma’s largest subsidiaries, Chengdu Tianma Microelectronics Co., Ltd.
It is also an MCF enterprise zone as defined by Section 1260H(d)(2) of the National Defense Authorization Act for Fiscal Year 2021. The Development Zone’s Economic and Informatization Office lists “military-civilian fusion” as one of its core responsibilities.12 Additionally, MCF enterprise zones generally have a state-owned defense enterprise as an “anchor.”
Getting blacklisted doesn’t mean the companies could not sell into U.S. military manufacturers, but would in theory be subject to more scrutiny and possible restrictions down the road.
Display Daily has a link to the letter, if you want to read it, here …
Molenaar’s press releases suggest China is a big discussion point – notably threats to the US auto industry from Chinese-made EVs. He gets an F from something called the Republican Accountability report, which appears to be a measure of the “Trumpiness” of U.S. conservative politicians.
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