CORNING, N.Y., Oct. 6 -- Corning Inc. announced Wednesday it will spend $425 million to expand its new liquid crystal display (LCD) glass substrate manufacturing facility in Taichung, Taiwan.
Corning said construction of the third phase of the new Taichung facility will occur in stages over the next two years, following a modular construction plan it said will be "paced to market demand." Initial manufacturing from this third phase is projected to begin in late 2006, with production continuing through 2007.
Corning made a $750 million investment for the development the new LCD manufacturing facility in Taichung in July 2004. In October 2004, it made a $326 million investment for the second phase expansion of the Taichung facility.
"The Taichung facility will ultimately manufacture Generation 5.5, 6, 7.5 and larger glass substrates, suited to meet the continued strong demand for desktop monitors and the emerging market for LCD televisions," said James P. Clappin, president, Display Technologies. "Our goal is to keep pace with projected LCD industry demand. However, we will phase the timing of production lines within the Taichung facility to meet the pending supply agreements with customers in Japan and Taiwan."
James B. Flaws, vice chairman and CFO, said Corning's previously announced expectations for its 2005 financial performance, including a $1.5 billion capital expenditure plan, will not be affected by the LCD plan expansion. "This third phase of the Taichung plant has been in our 2006 capital spending plan, and our goal is to be free-cash-flow positive in 2006 also."
Flaws added, "We continue to believe that worldwide sales of LCD televisions will double this year compared to 2004. We expect the LCD industry will need to build inventory to support the growing television market, which is more back-half loaded than the monitor and notebook computer markets. Nevertheless, we continue to closely monitor industry inventory levels and will adjust our production, should it be warranted."
Flaws said Corning's sequential volume growth for LCD glass in its recently completed third quarter was about 22 percent for the combination of its wholly-owned LCD business and Samsung Corning Precision Glass Co. Ltd., exceeding its expected growth by about 5 percent.
Corning also recently named Donald B. McNaughton, senior vice president of Display Technologies since 2003, as senior vice president, International and Strategic Ventures, and promoted James P. Clappin as general manager of Display Technologies.
In addition to continuing as a director of Samsung Corning Co. Ltd. and Samsung Corning Precision Glass Co. Ltd., McNaughton will be proposed as a director of Corning's equity ventures Corning's international network of offices. McNaughton has has leadership roles in Corning's Environmental Technologies and Display Technologies units since 1989.
Clappin, a Corning employee since 1980, was most recently general manager of Corning Display Technologies and was previously president, Display Technologies Asia.
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