Demand For Larger Screen Size To Drive Corning's Display Technology Business In 2014

Posted: Dec 30 2013, 4:01pm CST | by , in News

Demand For Larger Screen Size To Drive Corning's Display Technology Business In 2014
Photo Credit: Forbes

Corning’s revenues from its display business are expected to increase in the coming year driven by growing demand for larger displays in TVs, mobile devices and tablets. Revenues from its display technologies segment have declined over the past three quarters due to declining prices of LCD displays. The decline in price was mainly due to built up inventory in the supply chain.

Another factor driving growth in Corning's display business will be its 100% ownership of Samsung Corning Precision, a joint venture with Samsung. Corning will purchase Samsung’s 43% stake in the venture along with the remaining 7% from other share holders. The deal is supposed to be completed by the first quarter of 2014.

See our complete analysis of Corning here

Large screen TVs, mobile devices and tablets to bolster growth in display market

Consumer preference has shifted towards larger screen TVs, PC monitors, mobiles and tablets primarily because of the viewing pleasure that larger screens offer. Additionally, due to declining prices of LCDs, big screen TVs and monitors have become more affordable. 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. 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%. Together, the total area demand for LCD panels is expected to increase 9% in 2014.

Corning is well positioned to take advantage of the increase in LCD area demand. Its proprietary fusion based manufacturing process enables it to produce high quality glass of large sizes in a cost effective way. Apart from catering to requirements such as thinner and stronger displays, Corning will also be able to fulfill size requirements of devise manufacturers. Corning manufactures glass substrates of sizes up to Generation 10 (114 inches x 122 inches). Large size substrates also help reduce costs for device manufacturers.

100% ownership in Samsung Corning Precision will help boost revenues

Acquiring complete ownership of SCP will result in $2 billion inorganic growth in revenues for Corning’s Display Technologies segment. The acquisition comes along with a 10 year supply agreement with Samsung that will ensure a steady flow of revenues.

SCP is limited to supplying its products to customers in South Korea. Once Corning acquires 100% ownership of SCP, it will be able to serve a broader customer base. SCP’s facilities also offer capacity expansion benefits for Corning. Corning may use the excess capacity to address new developments like using Gorilla Glass as markerboards or for automotive applications.

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Source: Forbes

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