Corning Postpones Expansion Plan Over Economic Uncertainty

Corning Inc of the US recently announced it would postpone the fourth stage construction of its factory in Taichung till the end of 2010, maintain its glass melting furnaces this quarter, close some idle production lines early next year and cut capital expenditures for this year and next.

The world's No.1 maker of substrate glass for liquid crystal displays (LCDs) made the announcement in light of the anemic LCD panel market. According to market research organization Displaybank, LCD supply was 13.7 percent more than demand in the third quarter and the imbalance will escalate to 17.9 percent in the first quarter next year.

Corning Vice Chairman and Chief Finance Officer (CFO) James B Flaws said although Samsung Corning Precision Glass, a Corning subsidiary, shipped 12 percent more glass in the third quarter from a quarter earlier, the outstanding shipment was offset by a 10 percent decline at Corning itself.

He noted his company would reduce output capacity to cope with the economic meltdown. The company will cut capital expenditure for this year by $300-400 million to $1.8-1.9 billion and the outlay for next year by $100-200 million to $1.6-1.7 billion.

Corning recently revised downward its 20-25 percent growth forecast of 2009 LCD market to 15-25 percent increase in consideration of economic uncertainty. Revised figure represents a total of 2.6 billion square feet of LCD glass will be shipped worldwide next year, around 400 million square feet more than this year`s 2.2 billion square feet.

The company estimates LCD TV market at 105 million systems throughout this year, with 40 percent of sales concentrated in this quarter alone.

Source: CENS