Oct 31 (Reuters) - China's growing inroads in making

electronic displays could create national security concerns for

the United States by making it dependent on China for an

essential component in military technologies, the authors of a

new report said.

WHY IT'S IMPORTANT

Displays are increasingly important computerized military

equipment from fighter jets to augmented reality equipment that

helps troops overlay digital information on their view of a

battlefield, said Joe McReynolds, a co-author of the report,

titled "Displays are the New Batteries".

China's display subsidies could push rivals out of business

and leave the U.S. dependent on China during a conflict, said

James Mulvenon, the other co-author.

The report is set for publication this week from Pamir

Consulting, which helps business and government entities analyze

risks in China.

BY THE NUMBERS

China's rise in the display industry comes as a result of

the Chinese government subsidizing 50% to 70% of investment

costs through "investments, cash benefits, and discounts on

loans, land, and infrastructure," according to the report.

As of 2024, BOE has 16% of the global market for OLED

displays, which are the kind of advanced display used in

high-end smartphones, making it the second largest display

producer in the world, according to the report.

CONTEXT

Chinese firms such as BOE Technology Group have

made major inroads in the industry, securing business with firms

such as Apple ( AAPL ).

The industry was long dominated first by Japanese

manufacturers and now South Korea firms such as Samsung

Electronics ( SSNLF ) and LG, making displays for

smartphones, laptops and other devices.

Mulvenon previously wrote a report on Chinese chipmaker

Semiconductor Manufacturing International Corp that

circulated among U.S. officials before that firm was put on a

trade sanctions list.

KEY QUOTES

"At a strategic level, we don't have the luxury anymore of

simply allowing the market to play out in its natural and

predatory way in terms of where displays are being made,"

Mulvenon told Reuters.

"There is a real next frontier in competition over who

creates the next generation micro displays, and that has all

sorts of implications military and national security

applications," McReynolds said.