Corning: new capacity investments

Corning Incorporated announced on 21 July that its board of directors has approved a capital expenditure plan to expand its LCD glass and Gorilla glass manufacturing in response to strong market deman…

Corning Incorporated announced on 21 July that its board of directors has approved a capital expenditure plan to expand its LCD glass and Gorilla glass manufacturing in response to strong market demand. The company said that the plan will involve investments of approximately USD 800 million, to be used in the construction of a new LCD glass substrate facility in China, in the Beijing Digital TV Industry Park. Groundbreaking of the manufacturing plant, which will have up to Generation 8.5 glass-melting and finishing capabilities, is planned for September 2010, with production scheduled to begin in the first half of 2012. Corning also has further investments plans for construction projects in other regions to expand capacity for EAGLE XG LCD glass substrates and Gorilla glass. The company has already restarted an expansion project at its Taichung (Taiwan) LCD glass facility and is boosting capacity at its facility in Shizuoka, Japan, to produce Gorilla glass. Corning said that, under the new capital expenditure plan, it now intends to expand further in Taichung with additional capacity projected to come on line in the first half of 2012. “These investments will position Corning to capture significant new sales opportunities from rapidly increasing demand for our Gorilla glass, while continuing to meet the demand for our EAGLE XG products,” Wendell P. Weeks, chairman and chief executive officer, said. “The need for additional Gorilla glass capacity is based in part on the product“s new application as a TV cover glass,” Weeks explained. “Gorilla glass has already been embraced by information technology and handheld device makers, and the addition of the TV cover glass application creates a tremendous opportunity for further growth.” “We continue to forecast strong growth for LCD glass for the next several years. This growth will be driven primarily by continued market penetration of LCD televisions, with significant gains in Asia and South America, and an accelerated technology replacement cycle in more mature global markets. Therefore, we are making the appropriate capacity investments to take advantage of this projected demand,” said James P. Clappin, president, Corning Display Technologies, Asia. “China is not only one of the world“s leading consumers of LCD televisions; it is also poised to become a major producer of LCD panels for TV applications within the next several years. We are excited to be a part of this emerging market,” Clappin added. “China is quickly becoming a leader in LCD panel development, and Corning will be well positioned to grow with the China market through these capacity expansions,” noted Eric S. Musser, chief executive officer of Corning Greater China. “These investments, combined with our earlier announcement to expand production of auto emissions-control products and establish a life science presence in China, underscore Corning“s long-term commitment to the China market.” As a result of its investments, Corning has increased its forecast of capital expenditures from USD 1 billion to approximately USD 1.2 billion for 2010. The company said that it also expects 2011 capital expenditures to be higher than this year“s current forecast. Corning will provide additional details on its investments during its second-quarter financial results investor conference call to be held Wednesday, 28 July.