A provision in the 2025 U.S. defence spending bill (National Defence Authorisation Act) includes a measure asking the Pentagon to assess whether BOE Technology Group, a Chinese display supplier for Apple, should be designated as a Chinese military company.

If listed, BOE would not be immediately banned from U.S. business but would be barred in the coming years from participating in the U.S. military's supply chain.

The measure reflects concerns about BOE's alleged ties to China’s military and potential risks to U.S. military and commercial supply chains due to Beijing's heavy subsidies supporting BOE's dominance in global display manufacturing.

Specifically, BOE, on Apple's official supplier list, is scrutinised because it was originally founded as a military and defence supplier and is connected to the People's Liberation Army (PLA).

This raises concerns about a potential single-source vulnerability that could be exploited to disrupt U.S. military operations, especially during heightened tensions with China. However, a recent industry study commissioned by BOE's U.S. subsidiary argues that the display market remains highly competitive, with no single company able to significantly disrupt global supply chains.

While the bill is expected to become law later in 2025, the Pentagon's determination will guide future restrictions on BOE’s participation in military supply chains.

No immediate ban on BOE’s commercial dealings, including with Apple, is currently in place, but potential blacklisting could complicate Apple's supply chain in the future, although Apple sources displays from multiple suppliers worldwide.

In addition to U.S. Congressional scrutiny, BOE has faced legal challenges, including allegations of trade secret violations regarding Samsung Display technology, which could further impact its relationship with Apple and U.S. markets.

Based On Reuters Report