Corning: Corning Provides LCD Glass Market Growth Expectations

Corning Incorporated will tell investors that it expects the liquid crystal display (LCD) glass market, measured in square feet of glass, to grow more than 40 percent in 2006.

Peter F. Volanakis, Corning's chief operating officer, will tell investors that Corning's LCD glass volume is expected to grow at a faster pace than the market in 2006, given the higher growth rates of larger sized glass substrates. He will note that the market for Generation 5.5 and higher-glass substrates is expected to grow 150 percent in 2006. Volanakis will make the comments during the company's annual investors' meeting at the Mandarin Oriental Hotel in New York City Feb 03, 2006.

While desktop monitors will continue to account for the majority of demand in 2006, LCD TV is expected to be a key driver in building upon the momentum gained in 2005. LCD TVs comprised approximately 11 percent of all televisions sold in 2005 and the company expects this market penetration rate to be approximately 25 percent in 2007. Additionally, average LCD TV screen size is expected to grow from about 23 inches to over 27 inches during the same time period, accelerating the growth of the glass market.

"By 2007, LCD TV glass demand is expected to account for over 40 percent of the total LCD glass market," Volanakis will say. "TV market dynamics vary across geographic regions and in order for these anticipated penetration rates to materialize, LCD TV retail prices will need to continue to decline."

Increased growth of other display applications continues to contribute to total glass demand, nearly doubling from slightly over 800 million square feet in 2005 to over 1.4 billion square feet in 2007. Growth of color mobile phones in the small applications market, continued notebook penetration into the personal computer market, and displacement of CRTs (cathode ray tubes) by LCD monitors are all key contributing factors, in addition to LCD TVs, to glass substrate volume growth.

The growing demand for increasingly larger LCD TVs continues to drive the industry's demand for larger-generation substrates. In 2005, Generation 5.5 and larger substrates accounted for slightly more than 20 percent of the market and in 2007 they are expected to account for nearly 50 percent of the total LCD glass market.

"Corning's fusion draw process and ongoing product innovations continue to bring better properties for larger-generation size panels. We are confident that Corning will continue to play a leading role in helping LCD panel manufacturers enjoy greater economies-of-scale, thereby helping to reduce retail prices for consumers," Volanakis will tell investors. All of the new larger-generation glass substrates introduced in recent years by Corning, including Generation 8, which is expected to begin shipments by the third quarter, are designed to help panel manufacturers reduce production costs and increase the range of panel sizes for LCD TV.

"We continue to expand capacity at a rate that is paced to the growth in this industry, both in the glass demand of our customers and the growing popularity of LCD products with consumers," Volanakis will say. "Additionally, we are improving our capital efficiency at a very brisk rate. Over the past five years, Corning has improved its capital efficiency in LCD glass manufacturing by more than 50 percent, with manufacturing cost-reduction programs continually being developed."

600450 Corning: Corning Provides LCD Glass Market Growth Expectations

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