Economic Downturn - delay to LCD glass plant construction

Corning to delay construction at Taichung facility, cuts 2009 capex

Noting what he called current economic turbulence, Corning vice chairman and CFO James B Flaws indicated that the LCD glass maker is widening its estimates on the lower-end for 2009 worldwide LCD glass market growth. The company is now forecasting growth of 15-25%, down from a previous growth estimate of 20-25%. This would equate to the LCD glass market growing from about 2.25 billion square feet this year to 2.65-2.9 billion square feet next year, an increase of at least 400 million square feet, Flaws pointed out.

In line with its updated forecast, Corning has decided to delay construction and startup of capacity associated with the fourth phase of its Taichung facility until later in 2010. The company may also decide to keep tanks planned for maintenance in the fourth quarter and early next year off line and could idle others as appropriate.

As a result of the company's capacity decisions in the display glass business, Corning's total capital spending for 2008 and 2009 is expected to be approximately US$400-600 million lower. This year's capital spending will be between US$1.8-1.9 billion, a reduction of US$300-400 million. 2009 capital spending is now expected between US$1.6-1.7 billion, a US$100-200 million reduction from previous estimates.