Demand For Higher Generation Glass Substrates Will Drive Corning’s Display Volumes

by Trefis Team
Rate   |   votes   |   Share

Corning’s (NYSE:GLW) Display Technologies segment accounts for a third of Corning’s revenue. It manufactures glass displays used in consumer electronics such as TVs, PC monitors, mobiles and tablets. Since 2011, declining LCD prices have taken a toll on the segment’s revenues which dropped from $3.14 billion to $2.54 billion in 2013. [1] Cost effective manufacturing methods and pile up of inventories led to steep declines in LCD prices in 2011 and 2012. The effect continued well into 2013 and 2014, however with moderate price declines.

Corning has seen consistent growth in glass volume throughout 2011 to 2013, which has partially offset price declines. In the first quarter of 2014, volumes declined due to some technical difficulties at one of Corning’s customers in Korea but the outlook for the year remains optimistic as volumes are expected to stabilize at that customer’s from the second quarter onwards. Corning expects to see growth in volumes at its display business in line with industry growth. [2] In terms of the total area of glass sold in the retail market, the industry is expected to grow in the high single digits in 2014, after growing 10% in 2013.

In the coming years, Corning will benefit from the growing demand for higher Generation (larger sized) glass substrates from device manufacturers. Additionally, demand for LCD TVs, PC monitors, mobiles and tablets, especially with larger screen sizes, will continue to drive display volumes at Corning.

See our complete analysis of Corning here

Corning Will Benefit From Increase In Demand For Higher Generation Glass

Glass substrates are manufactured in different sizes which are indicated by the “Generation”. Higher Generations have a larger area. Display panel manufacturers prefer higher Generation glass,specifically Generation 8, since it is much more economical. In the third quarter of 2010, 41% of LCD TV panels were produced using Generation 8 LCD glass. [3] By third quarter of 2013, the number increased to 87%. [4]

Additionally, with improvements in glass manufacturing process, higher Generation glasses are becoming thinner and lighter and can be used to produce display panels for a variety of other devices, such as smartphones and tablets. In the third quarter of 2010, the use of Generation 8 glass substrates was limited to LCD TVs and monitors. However, by the third quarter of 2013, Generation 8 glass substrates received acceptance in display panels for notebooks, tablets and smartphones, albeit accounting for a small proportion. The over demand for Generation 8 glass substrates is expected to increase 3% by the third quarter of 2014.

Corning is well positioned to take advantage of the increase in demand for higher Generation glass substrates. Its proprietary fusion based manufacturing process enables it to cost effectively produce high quality glass of sizes up to Generation 10 (2850 mm x 3050mm). Apart from catering to size requirements of device manufacturers, Corning will also be able to fulfill requirements such as thinner and stronger displays.

Growing Demand For Consumer Electronics With Larger Screen Sizes Will Drive LCD Volumes

Growing demand for LCD TVs will help boost sales volume of glass substrates. Shipments of LCD TV are expected to grow 5% in 2014 driven by declining prices. [5] Much of the growth in demand for LCD TVs is expected to come from emerging markets because of the growing availability of LCD TVs in the markets and a decline in preference for traditional Cathode Ray Tube TVs. The Football World Cup in 2014, which will be held in Brazil, will already have helped stimulate demand for LCD TVs.

Separately, the demand for LCD TV panels larger than 50 inches is expected to grow 18.5% in 2014, outpacing the expected 5% growth in overall demand for LCD panels for TV. [6] The increase in demand for large screen sizes in LCD TVs is primarily because of the viewing pleasure that larger screens offer. Additionally, declining prices have made large screen LCD TVs more affordable.

Complementing this growth is the demand for larger sized monitors and smartphones. Demand for LCD monitors of size 23 inches and above are expected to grow 15.5% in 2014 and mobile phone panels of 5 inches and above will grow a staggering 59%. [6] Together, the total area demand for LCD panels is expected to increase 9% in 2014.

See More at Trefis | View Interactive Institutional Research (Powered by Trefis) | Get Trefis Technology

  1. Corning’s 10-K SEC Filing, []
  2. Corning Management Discusses Q1 2014 Results – Earnings Call Transcript, April 28 2014, []
  3. Gen 8 Now the Most Important Fab for LCD TV Panel Production, December 2010, []
  4. Larger Fabs Being Used to Make Mobile Displays, April 2014, []
  5. LCD TV Growth Improving, As Plasma and CRT TV Disappear, April 2014, []
  6. Growing TV sizes Boost Overall Display Market, December 9 2013, [] []
Rate   |   votes   |   Share


Name (Required)
Email (Required, but never displayed)
Be the first to comment!