Corning investing in flat-screen glass

Corning is investing $600 million to boost production of flat-screen glass used in computer monitors and televisions, a fast-growing business that has helped keep the company afloat since the telecommunications crash of 2001.

The 152-year-old materials company said Thursday it will expand manufacturing of liquid crystal display glass at its plants in Tainan, Taiwan, and Shizuoka, Japan, over the next two years. About $240 million will be spent this year.

"The LCD industry is in a growth stage and Corning is stepping up to meet anticipated customer demand around the world," said Donald 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, which is based in the western New York city of Corning, commands about 50% of the worldwide market for the super-smooth, ultrathin glass. It has already spent $180 million since last summer to boost capacity at its LCD glass plants in Japan and Taiwan.

In the fourth quarter, a 39% jump in demand for LCD glass boosted sales in its display technologies business to $199 million from $104 million a year earlier.

Sales of LCD high-definition TVs more than tripled last year to reach 3% of the worldwide TV market and could jump as high as 16% by 2006, it predicted.

During the telecommunications boom in the late 1990, Corning invested $2 billion to meet surging demand for optical fiber and cable and swelled its work force from 15,000 to 43,000 employees. The industry's rapid slowdown into a deep recession in 2001 almost spelled ruin.

The crisis forced Corning to shed noncore and money-losing businesses. Under James Houghton, who returned as chief executive in April 2002, it shut more than a dozen plants and nearly halved its work force to 22,500.

The company now gets less than half its revenues from the telecommunications industry, which accounted for 77% of sales at the end of 2000, and does not anticipate a robust recovery in that sector until at least next winter.

More than half of its optical fiber business, which remains the world's largest, has been mothballed and isn't expected to resume production until at least late this year.

In morning trading on the New York Stock Exchange, Corning shares were up 13 cents at $12.12.

600450 Corning investing in flat-screen glass
Date: 9 February 2004

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