Corning Incorporated announced 21 July 2004 that its board of directors has approved a capital expenditure plan of USD 750 million to further expand its LCD glass substrates manufacturing capacity. Th…
Corning Incorporated announced 21 July 2004 that its board of directors has approved a capital expenditure plan of USD 750 million to further expand its LCD glass substrates manufacturing capacity. The majority of the investment will be used to fund the first phase of the new Corning facility in Taichung, Taiwan. In April 2004, Corning announced board approval for preliminary funding to develop the facility plans. This first phase of the Taichung facility will add glass melting and finishing capacity capable of producing Generation 5.5 and Generation 6 glass substrates. Corning expects to begin initial manufacturing in Taichung during the 3Q of 2005, with additional capacity continuing to come 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 P. Weeks, president and chief operating officer, said. “We are increasing capacity to provide our customers with state-of-the-market large-size LCD glass substrates toward which the industry is quickly moving,” he said. “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 said. As part of this capital expenditure plan, Corning“s board also approved preliminary funding for two additional expansion projects: preparation for a second phase of construction at the Taichung facility and expansion of the Shizuoka, Japan LCD glass facility. The second stage of the Taichung facility would begin in 2005 and would double the facility“s large-generation production. The expansion of the Japan LCD glass facility will add significant capacity capable of producing Generation 5.5, Generation 6 and larger glass substrates. The 21 July 2004 announcement is the company“s third major LCD capital expansion in the past 12 months. The 2004 portion of the plan is included in Corning“s previously announced capital spending forecast of USD 950 million to USD 1 billion for this year. Ongoing capacity expansions are also underway at Samsung Corning Precision Glass Co., Ltd., Corning“s equity affiliate in South Korea. Corning reaffirmed its belief that annual market volume growth for LCD glass could range from 30% to 50% over the next few years, with 2004 volume growth likely to be at the high end of this range. Weeks said that Corning expects that the 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 television prices expected to continue to decline, worldwide LCD television penetration may reach 16% of the total television market in 2006. Donald B. McNaughton, senior vice president, Display, said, “Our new Taichung facility will produce large-generation substrates designed to meet the emerging demand for LCD televisions, and larger-size flat-screen desktop monitors and notebook computers which are becoming the choice in both homes and offices.”