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Corning to invest US$600 million to boost LCD output

Corning Inc, the world's largest maker of fiber-optic cable, will invest US$600 million to boost production of liquid crystal displays (LCDs) for computers and televisions to meet rising demand.

The expansion at Corning's factories in Shizuoka, Japan, and Tainan, Taiwan, will occur in the next two years, with about 40 percent, or about US$240 million, of the spending taking place this year, the Corning, New York-based glassmaker said in a statement.

"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 is betting rising demand for products such as computer monitors and flat-screen televisions based on liquid crystal displays, or LCDs, will compensate for shrinking optical fiber sales.

Chief financial officer Jim Flaws said last month that Corning sold out of its LCD glass in the fourth quarter and expects to sell out again this quarter despite adding capacity.

"They're investing in a business that's white hot because demand is so strong," said Gabriel Lowy, an analyst at Blaylock & Partners LP in New York.

The expansion will boost production of larger sheets of liquid crystal display glass, which are used in TVs. The investment is in addition to the US$180 million that Corning in July said it would spend to expand the Tainan factory's LCD capacity.

Annual market volume growth for LCD glass could be 30 percent to 50 percent over the next several years, the company said in the statement.

Corning accounts for about 50 percent of worldwide volume in flat panel glass production, according to Lowy. The company's competitors in the market include Japan's Asahi Glass Co.
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