(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.

The industry was long dominated first by Japanese manufacturers and now South Korea firms such as Samsung Electronics 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.

(Reporting by Stephen Nellis in San Francisco; Editing by Sonali Paul)

By Stephen Nellis