Corning Inc. banks on Flaws’ prediction

Date: 31 October 2005
Source: Stargazettenews.com

Date: 31 October 2005

Jim Flaws had better be right.Flaws, Corning Inc.’s chief financial officer, thinks soaring energy prices won’t keep consumers from buying expensive liquid crystal display televisions.

If he’s right, 2006 could be a very good year for Corning Inc. indeed.If he’s wrong, the stock of the Twin Tiers’ largest employer could be worth about as much as Confederate money this time next year.Corning Inc. makes the high-tech, flat-panel glass that goes into the wall-size televisions that sell for thousands of dollars.Soaring sales will mean higher demand for glass and higher profits for Corning Inc.But if consumers decide that the predicted 70 percent increase in natural gas bills this winter means they can wait for a super-sized TV, Corning Inc. is suddenly out of options.Liquid crystal display glass is the company’s only profitable business.The diesel pollution control business is promising, but heavy investment is eating up any potential profit.The same is true in the company’s life sciences business.

And telecommunications? It’s still declining and losing money, despite optimism over projects like the national optical fiber rollout of Verizon Communications.

Flaws has reasons to be optimistic, of course.

The people who buy TVs the size of a pickup truck bed generally don’t have trouble paying their heat bills. But you can sell only so many of the fancy TVs to Donald Trump and Bill Gates.

Back in the economic real world, where people punch time clocks and shop at Wal-Mart and don’t get stock options by the truckload, the promised energy crunch will force some difficult decisions.

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Corning, AGC Glass-substrate Capacity Expansion Projects Unit: 1 furnace Company Location 2004 2005 2006 Corning U.S.
Japan 1 2 1 S. Korea 6 6 3 Southern Taiwan 4 2 0 Central Taiwan 0 4 2 AGC Japan 0 1 1 Taiwan (Yunlin) 1 1 1 Source: PIDA (Photonic Industry & Technology Development Association) Taiwan TFT-LCD Panel Makers Happy to See Substrate-price Falls in 2006 Taipei, Dec. 27, 2005 (CENS)--Both of the world's top-two glass-substrate makers are actively expanding their production capacity in Taiwan, which is expected to cut substrate transportation time and cost for local thin film transistor-liquid crystal display (TFT-LCD) panel makers and boost production efficiency, according to Michael Wang, project manager and senior analyst of Taiwan's PIDA (Photonic Industry & Technology Development Association).According to Wang, Asahi Glass Co. (AGC) of Japan has solved problems in lowering the defect-free rate for the production of fifth- and sixth-generation (5G, 6G) glass substrates, and is expected to tap the market with products with higher price competitiveness in 2006 to grab more market share in the 6G substrate businessIn addition, Wang added, the aggressive capacity added by both Corning of the U.S., the world's No. 1 substrate supplier, and AGC, the No. 2, will lead to price drops for glass substrates and will especially benefit TV panel makers such as AU Optronics Corp. (AUO) and Chi Mei Optoelectronics Corp. (CMO) in TaiwanCurrently, Wang pointed out, a 6G substrate is priced at about 27,000 to 30,000 Japanese yen, about 1,000 to 2,000 yen lower than in the third quarter of 2005.

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