Corning Singapore Holdings Private Limited, a wholly owned subsidiary of Corning Incorporated (NYSE: GLW), and Samsung Display Co., Ltd. have signed a Memorandum of Understanding with the government of Wuxi New District, China, intending to establish a new equity venture for the manufacture of TFT-LCD glass substrates in China. Pending a final signed agreement between Corning and Samsung Display, the new equity venture is expected to be formed later this year, subject to receipt of regulatory approvals.
This newest venture will be an extension of a decades-long alliance between Samsung and Corning, and will leverage Corning’s LCD glass substrate technology and Samsung Display’s LCD display expertise. The new entity will supply LCD glass substrates to Samsung Suzhou LCD Co., Ltd. in China.
Corning and Samsung Display will authorize the new company to spend up to US$600 million to construct a new LCD glass substrate facility in the People’s Republic of China. The new company will make the investment in phases over the next few years as stages of the facility are constructed and brought online. With the support of the Wuxi municipal government, the new entity will be located in Wuxi New District, Wuxi City, Jiangsu Province, in China. The manufacturing plant will have Gen 8 (2,200 x 2,500 mm) glass-melting and finishing capability. Construction of the facility will start by the end of 2012, with production expected to begin at the end of 2013, in time to meet demand for the start-up of Samsung Suzhou LCD.
Although new LCD glass capacity is being built in China, Samsung Corning Precision Materials Co., Ltd. (SCP), an equity venture of Samsung and Corning, will be idling some of its LCD glass capacity in Korea. “As a market leader in the LCD glass industry, Corning has built a highly efficient worldwide supply network, which includes our equity venture companies, to meet customers’ needs,” said James P. Clappin, president of Corning Glass Technologies. “Shifting a portion of SCP’s capacity in Korea to this new facility in China will enable us to provide outstanding local supply in support of Samsung’s new panel-making operations there,” Clappin added.
Market research firm DisplaySearch said more than 44 million LCD TVs were shipped to retailers in China last year, and that the market should increase to over 56 million units in 2014.
“China’s LCD TV end market represents more than 20% of the worldwide total. Consequently, LCD panel manufacturers have been investing in China-based production,” said Donggun Park, executive vice president of Samsung Display and leader of the company’s LCD business. “Our new LCD glass venture with Corning will help enable Samsung Display to succeed in capturing a leading portion of this market through our new Samsung Suzhou LCD entity in China,” Park said.
“Corning and Samsung have had a long and successful collaboration in the display industry, dating back nearly 40 years to the early days of television,” said Wendell P. Weeks, Corning’s chairman, chief executive officer, and president. “The strength and success of our ties are built on Corning’s ability to develop and make high-technology glass with the key attributes that support Samsung’s businesses. Together, we have led the evolution of displays, from the high-growth years of CRT, to our current successful business supplying world-leading substrates for today’s high-definition LCD TVs, and now to the launch of this important new venture in China,” Weeks said.
Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning’s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political or financial instability, natural disasters, adverse weather conditions, or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; retention of key personnel; stock price fluctuations; and adverse litigation or regulatory developments. These and other risk factors are detailed in Corning’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics. Drawing on more than 160 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy, and metrology.