Corning Announces Major LCD Glass Capacity Expansion; Company to Invest $600 Million to Boost Large Generation Glass Production

Corning Incorporated announced that its board of directors has approved a $600 million capital expenditure plan to further expand the company's liquid crystal display (LCD) glass substrates manufacturing capacity in Taiwan and Japan.

The expansion will occur in phases over the next 24 months, with approximately 40 percent of the total expenditure to be incurred this year.

This new investment will add melting and finishing capacity to the company's Tainan, Taiwan and Shizuoka, Japan facilities. It will add significant production capacity of Corning's Generation (Gen) 5 glass substrates; more than double the capacity of Gen 6; and add Gen 7 capability. Each successive generation is a larger glass sheet size, enabling more efficient production by LCD manufacturers. Construction at the company's Shizuoka, Japan and Tainan, Taiwan facilities will begin immediately. These facilities are planned to start producing glass from these expansions late in 2004 through 2005, as operations come on-line.

Corning, a world-leading supplier of glass substrates for LCD is increasing its manufacturing capacity of large generation glass worldwide to keep pace with anticipated industry demand and the continuing shift to larger glass substrates by LCD manufacturers. This industry growth is driven by increasing market penetration of LCD desktop monitors and ongoing growth of notebook computers. Corning continues to believe that the annual market volume growth for LCD glass could be in the 30 percent to 50 percent range over the next several years. Corning's revenues for LCD products will be dependent on market shares, pricing trends and the impact of exchanges rates.

"The LCD industry is in a growth stage and Corning is stepping up to meet anticipated customer demand around the world," said Donald B. McNaughton, senior vice president of Corning Display. "Flat panel monitors and notebook PCs are quickly becoming the norm in homes and offices, while high-definition LCD-TV may soon emerge as an additional driver of glass usage."

Corning anticipates that LCD-TVs will become increasingly popular with consumers. LCD television sales reached 3 percent of the worldwide TV market in 2003, more than tripling the 2002 rate. Corning now believes that LCD-TVs may be up to 16 percent market penetration as early as 2006.

This penetration level may vary depending on pace of consumer acceptance of the LCD format, continued price declines and other factors. The larger displays used in LCD-TVs are beginning to fuel the demand for Gen 6 size substrates.

This major investment is in addition to the company's $180 million expansion project, previously announced in July 2003, which is already underway to increase Gen 5 and 6 glass manufacturing capacity in Corning's facility in the Tainan Science-based Industrial Park, Taiwan. Ongoing capacity expansions are also underway at Corning's equity venture company in South Korea, Samsung Corning Precision Glass Co., Ltd. but are not part of today's announcement.

"Corning has remained a world-leader in this industry since we invented the first glass substrate for active matrix LCDs in the 1980's," said James P. Clappin, general manager of Corning Display Technologies. "Large generation substrates are infusing new cost-efficiencies throughout the LCD industry with Corning's EAGLE2000(TM) glass leading the way. We believe our proprietary fusion technology is best in class worldwide for producing very large glass substrates with the flatness, pristine surface quality and advanced attributes that our customers require."

600450 Corning Announces Major LCD Glass Capacity Expansion; Company to Invest $600 Million to Boost Large Generation Glass Production

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