LCD glass substrate demand to grow 25% in 2008

With the upcoming 2008 Beijing Olympics, conservative expansion plans of panel makers and continuous growth of the LCD display market, Corning expects worldwide demand of LCD glass substrates to grow to two billion square feet in 2008, up 25% from 1.6 billion square feet this year, according to James B Flaws, vice chairman and CFO of Corning.

Global demand for glass substrates in 2005 and 2006 was around 800 million square feet and 1.2 billion square feet, respectively, said Flaws.

James B Flaws, vice chairman and CFO of Corning
Photo: Max Wang, Digitimes, October 2007

LCD panel makers and LCD component makers went through a hard time in 2006 and they decided to reduce output by the end of 2006, helping to maintain the inventory of the first quarter at a low level, Flaws pointed out, adding that the move then brought the recovery of the market in the second quarter.

Average selling prices (ASPs) for glass substrates in 2006 dropped 16% on year, which was larger than the average price decrease in previous years, Flaws indicated.

As panel makers have no intention to expand capacity aggressively in 2008, the tight supply situation of LCD panels next year will be more serious than that in 2007, Flaws estimated.

When asked if there will be any potential expansion plan from Corning in the Asia market, Flaws, in response, stated the company´s joint venture with Samsung Electronics began third-stage expansion in 2006 to meet demand from customers such as Sharp, Samsung Electronics and LG.Philips LCD. In the meantime, the company´s plant located in Beijing, China will start operations next year.

Overall, a joint venture is not the top priority for the company when it comes to investment, Flaws stated. Corning will continue investing in the glass substrate market if demand from customers rises further.

Glass substrates account for 41% of the company´s overall revenues in 2006, the biggest sales contribution for Corning, according to the company.