LCD TVs To Be 95 Percent of Global TV Shipments in 2014, Corning Says

Global LCD TV sales will rise to 222 million units this year, from 190 million in 2010, and jump to 300 million sets by 2014, accounting for 95 percent of TV shipments, Corning Glass Technologies President James Clappin said Friday at a conference in New York.

Global LCD TV sales will grow 12 percent annually through 2014, accounting for 95 percent of TV shipments, up from 77 percent this year and led by China at 97 percent, Clappin said. Plasma TVs will have a 5 percent share in 2014, about half the estimates of many analysts. While plasma TVs did gain share in December amid lower prices, LCDs will have an edge in manufacturing costs, Clappin said.

The growth in LCD TVs will come at the expense of plasma and CRT direct-view TVs whose sales will drop to 16 million and zero units in 2014 from 18 million and 38 million in 2010, Clappin said. The 2010 install base for LCD TVs varies, ranging from 125 million units or 54 percent of households in Japan to 455 million and 21 percent in China. In North America, the install base is 340 million units or 44 percent of households, he said. There are about 2.2 billion LCD TVs installed globally or 27 percent of households, Clappin said.

As LCD TVs increasingly enter homes, the replacement cycle for them appears to be shorter than the direct-view and projection TVs they're replacing, Clappin said. LCD TVs are being replaced every six years, against nine years for CRT-based sets, said Clappin, quoting from a study Corning did with McKinsey & Co. The survey polled executives in the TV business in six major global markets asking their views on TV replacement cycles for the next 3-6 years, Clappin said.

The expected growth in TV and the emergence of tablet PCs will drive demand for LCD glass to 4.5 billion to 5.3 billion square meters by 2014, from 3.6 billion to 3.8 billion square meters this year, Clappin said. To meet increased demand, Corning is boosting capital spending this year to $2.4 billion to $2.8 billion, up from $1 billion in 2010, Chief Financial Officer James Flaws said. The capital budget includes $1.2 billion to $1.5 billion for display technology. That includes $800 million for a new 8.5-generation LCD glass plant being built in Beijing. The factory is expected to start production in first half 2012 for several customers, including BOE. Corning incurred $497 million in display-related capital costs in 2010, company officials said.

The investment in China is aimed at increasing total sales there, including cable, displays and environmental products, to $2 billion by 2014 from $829 million last year, said Corning Greater China CEO Eric Musser. The increased sales in China comes amid the arrival of new panel plants, eight of which are either under construction or will start building by 2012, Clappin said. The factories include three 8/8.5G plants, he said.

Another $200 million is funding the conversion of Sharp’s former 5G plant in Shizuoka, Japan, to produce Gorilla scratch-resistant TV cover glass. Corning also will revamp glass tanks this year at its Taichung, Taiwan, plant to make Gorilla, company officials said. Sony is building Gorilla into 40-, 46-, 55-, and 60-inch LCD TVs that ship in March and April, a Corning spokesman said. In connection with the launch, Corning and Sony will help in training Best Buy staff to sell the technology, he said. Best Buy and Corning aired a 2-minute video on their respective websites in January highlighting the technology and will add a new video in April describing it, the spokesman said.

Sales of Corning’s specialty materials, which includes Gorilla glass, will rise to $1.8 billion in 2014 from $600 million in 2010, a narrowing of a $1 billion to $4 billion range given last year, company officials said. Gorilla glass will hit $1 billion this year, the company has said. The increase in sales will come as the number of smartphones, notebook and tablet PCs deploying cover glass grows 1.33 billion units in 2014, from 370 million in 2010, Clappin said. Sales of cover glass-equipped cellphones will jump to 1.1 billion units by 2014, up from 300 million last year, Clappin said. Among the products currently using the Gorilla panels are Apple iPad, Samsung Galaxy S and Nokia N series smartphones and Hewlett-Packard’s Envy PC.

Corning’s Gorilla glass sales in 2014 may include major appliance and automotive applications, company officials said. Corning is working with touch technology companies on Gorilla panels that could be built into refrigerators. The Gorilla-equipped automotive and major appliance products could emerge within 18-24 months, Business Director George Wildeman said. Gorilla glass could be designed as cover glass for automotive instrument panels, he said. “It’s more in the exploratory stage right now” for major appliances, he said. “It’s not cost effective to apply touch technology over an entire (Gorilla) cover right now and we are working with a lot of touch integrators” on finding a solution, Wildeman said.

Meanwhile, 0.4mm and 0.3mm thick versions of Eagle XG Slim will be available this year targeting mobile applications, company officials said. The glass can be produced using 5G glass tanks, while 6G is deployed for 0.5mm versions, company officials said.

In expanding outside LCD glass, Corning is weighing developing ClearCurve fiber cable that could be sold at retail under its own or a customer’s brand, Product Line Manager Scott Torrey said. The cables, which can deliver 10 Gbps data rates over 30 meters or more, could be replacements for HDMI and USB cables, company officials said. The cables are “easier to route” than copper-based USB or HDMI products, he said. Corning’s ClearCurve cable has been deployed in fiber-to-the-home systems including with Verizon’s FiOS for multiple dwelling units, Corning officials said. ClearCurve annual sales are $200 million, company officials said. Corning also is gearing up for further deployments this year at 19 sites in Australia as part of a 5-year, $1.2 billion contract to supply optical cable and hardware for the National Broadband Network, Torrey said. The network initially launched in Australia last year with five sites, he said. Corning also is providing optical cable and hardware for Bell Canada, Deutsche TeleKom, Telefonica in Spain and China Mobile and China Telecom, Torrey said.