Corning sees continued LCD growth

Corning Incorporated told investors 4 February 2005 that it expects the liquid crystal display (LCD) glass market to grow between 40% and 60% in 2005 and continue to grow at a compound annual rate of …

Corning Incorporated told investors 4 February 2005 that it expects the liquid crystal display (LCD) glass market to grow between 40% and 60% in 2005 and continue to grow at a compound annual rate of 40% through 2007. Peter F. Volanakis, president of Corning Technologies, noted that while the majority of the recent growth in LCD glass has been in the areas of desktop monitors and notebook computers, LCD television is expected to be a key driver of a “third wave” of glass demand, hitting with more impact in 2005. Volanakis made the comments during the company“s annual investors“ meeting in New York City. LCD TVs comprised 5% of all televisions sold in 2004 and the company expects they will reach 10% market penetration in 2005. Corning believes that LCD TVs may account for around 21% of the world“s television sales in 2007, but the rate of LCD TV adoption will vary by region of the world and may vary from quarter to quarter depending on buying patterns, inventories or other market factors. Volanakis cautioned investors not to strictly focus on U.S. television sales, but rather to examine global market demand and trends, as more than 75% of the world“s televisions are sold outside of North America. “The future growth rate for LCD will be greatly influenced by the pacing of LCD TV penetration in consumer markets worldwide,” Volanakis said. “As CRT TV“s continue to decline in market penetration, we believe LCD TV will emerge as the primary alternative technology in the below 40-inch market, as they provide the best balance of form, function and cost.” Televisions with screen sizes below 40″ (measured diagonally) are expected to represent more than 90% of all units that will be sold through 2007. While this segment is currently dominated by CRT“s, it is the prime target for LCD TV penetration. Volanakis also told investors that LCD TVs required only about 15% of total glass demand in 2004, as the remaining 85% was used in desktop monitor and portable applications. Compounded annual growth for glass used in LCD TVs is expected to be almost 100% from 2004 to 2007. “With Corning“s proprietary fusion draw process bringing larger generation sized panels to market, we are confident that Corning will continue to play an important role in helping LCD TV panel manufacturers enjoy greater economies-of-scale, thereby helping to reduce retail prices for consumers,” Volanakis told investors. Corning“s fusion technology has enabled the company to continually be first to market with next-generation substrate sizes, including the recent commercial availability of Generation (Gen) 7 substrates introduced on 16 January 2005 by Samsung Corning Precision Glass Co., Ltd., Corning“s 50% owned equity company, the firm said. Gen 7 substrates are nearly three times the surface area of Gen 5 substrates. All of the new large Generation glass sizes introduced in recent years by Corning, including Gen 8 size which is currently in development, are designed to help panel manufacturers reduce production costs and increase efficiency. “We continue to expand at a rate that will keep pace with the growth in this industry, both in the glass demand of our customers and the growing popularity of LCD products with consumers,” Volanakis told investors. “We are committed to balancing growth with stability.” The bulk of Corning“s capital expenditures in 2005 will fund LCD facility expansions. The company“s proprietary fusion technology is modular in nature, providing Corning with the ability to adjust its capacity builds to match market changes that may alter actual customer demand.