Corning Inc, the world's biggest maker of glass for liquid-crystal displays (LCD), yesterday said it is planning to build a new LCD glass substrate finishing facility in China, marking its first move in tapping the up-and-coming flat panel market there.
Corning said the board has approved the investment, but has not finalized the location, according to a statement released yesterday. The New York-based glassmaker declined to disclose the size of the investment.
With this investment, Corning, which has a 70-percent share in the global LCD glass market, would be the first thin-film-transistor (TFT)-LCD glass substrate supplier to set up a production facility in China.
"Corning is fully committed to the LCD industry in China and to growing with our customers in this important region of the world market," said Nitin Kulkarni, president of Corning Display Technologies in China, in the statement.
Corning Display Technologies is a LCD glass manufacturing unit fully owned by Corning as well as a cash cow for the glassmaker.
Without any plants in China, Corning supplies the three Chinese flat-panel makers -- BOE Technology Group Co (京東方), SVA Group Co (上海廣電) and InfoVision Optoelectronics (龍騰光電) -- with glass from its factories elsewhere.
The Chinese LCD panel makers are expected to account for 3 percent of LCD glass consumed around the globe by 2007, Corning said.
"This investment will enhance our industry-leading position as a supplier of the most pristine LCD glass substrates in the world," Kulkarni said.
Last month, Corning launched its second melting facility worth US$1.5 billion in Taiwan, and the company predicted Taiwan would outpace South Korea in consumption of LCD glass by next year.
By the end of next year, local TFT-LCD makers would make up 44 percent of total glass sales, it said.
Overall LCD glass demand will nearly triple next year, fueled mostly by the popularity of LCD televisions, compared with the 46 million square meters consumed in 2004, Corning said.
Last year, flat-panel manufacturers purchased around 74 million square meters, up approximately 60 percent from a year ago, as TFT-LCD screens increasingly replaced bulky cathode-ray-tube computer monitors and demand for LCD TVs grew, the company said.
Corning said last week that it returned to profitability last year by making US$585 million, or US$0.38 per share, compared with US$2.17 billion in losses in 2004.
Looking ahead, Corning said the gross margin for Corning Display Technologies would be stable as rising sales and better cost efficiency offset price erosion.
Sales for the LCD manufacturing arm would grow by 3 percent to 8 percent this quarter, it said.
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