Corning Says Modest Growth Expected
Eric S. Musser, vice president and general manager of Corning Optical Fiber, said he expects modest growth in the market for 2005, during Corning's 24th annual optical fiber briefing held at OFC/NFOEC 2005.
"Although Japan is expected to decline slightly relative to 2004, this decrease will more than likely be offset by strength in North America and modest growth in other regions of the world," Muller said. "Worldwide fiber demand growth will continue to come from the metro and access segments -- with growth in North American broadband initiatives leading the way."
Corning said the total 2004 worldwide fiber market remained stable for the second year in a row, at about 55 million fiber kilometers, which matched its expectations provided at last year's event. The company said there is still ample room for innovation in fiber, cable, hardware and equipment and that it remains committed to this goal through opportunities in fiber-to-the-premises (FTTx)-optimized fiber, cable, hardware and equipment.
Musser said recent industry data shows the rapid worldwide conversion to low-water-peak single-mode fiber following Corning's conversion to this product offering in 2003.
"The market is recognizing the value in low water peak fiber, as it is quickly becoming the standard," he said. "We believe our conversion has raised the bar for single-mode fiber quality in the industry."
He added, "We saw continued growth in hardware and equipment globally in 2004, driven by access construction and this business now represents about half our telecommunications segment's revenue. Corning experienced fiber price declines of less than 10 percent in 2004, and performed well with an 18 percent increase in fiber demand in a market of relatively flat volume. This was driven primarily by growth in North America resulting from the commencement of Verizon's FTTx buildout.
Musser said, "Any industry recovery will be led by construction in the access segment of the network, which is why we are focused on the FTTx opportunity around the globe. Corning will be working to grow its hardware and equipment business globally and expects modest growth in the fiber and cable volume, primarily driven by FTTx, with fiber pricing continuing to moderate."
Corning also announced the execution of a long-term purchase and supply agreement for large-size liquid crystal display (LCD) glass substrates with AU Optronics Corp. Under the agreement, Corning Display Technologies Taiwan Co. Ltd. will supply significant quantities of Generation 6 LCD glass to AU Optronics (AUO) for its new LCD fabrication facility in Taichung, Taiwan. As part of the agreement, AUO will prepay Corning in several installments and AUO will be able to use the installments in the form of credits against future glass purchases over the life of the contract.
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