Corning to spend $750 million on LCD glass factories

Corning Inc. plans to spend $750 million on the expansion of its LCD substrates manufacturing capacity, including the creation of a second factory in Taichung, Taiwan, the company said Thursday.

The first phase of a facility at Taichung would include glass melting and finishing capacity capable of producing so-called 5.5 generation and sixth generation glass substrates.Corning said it expects initial manufacturing to begin in Taichung during the third quarter of 2005, with additional capacity coming online through 2006.

"Total worldwide flat-panel glass demand could triple over the next four years if LCD monitor penetration continues and LCD television emerges as we expect," Wendell Weeks, Corning's president and chief operating officer, said in a statement. "We are closely monitoring consumer demand for LCD television, as well as supply chain inventory levels, and we will pace our manufacturing expansions accordingly," Weeks added.

As part of this capital expenditure plan, Corning's board also approved preliminary funding for two additional expansion projects. These are: preparation for a second phase of construction at the Taichung facility, which would begin in 2005 and would double the facility's large-generation production; and preliminary funding for the expansion of the company's Shizuoka, Japan LCD glass facility.

The announcement is Corning's third major LCD capital expansion in the past 12 months, although the 2004 portion of this plan is included in Corning's previously announced capital spending forecast of $950 million to $1 billion for 2004.

Corning said market volume growth for LCD glass could range from 30 to 50 percent per year for several years, with 2004 growth likely to be at the high end of this range.

Weeks said Corning expects LCD glass growth rate will increasingly be driven by LCD television penetration, with total televisions sold in 2004 expected to double over last year's sales of 4.5 million sets. With LCD TV prices expected to continue to decline, worldwide LCD television penetration may reach 16 percent of the total television market in 2006.

600450 Corning to spend $750 million on LCD glass factories

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