“Corning’s investment decision is based on customer needs and market needs, centering on the location of the customer and building a factory near the customer.” Ji Kebin, president of Corning Glass Technology Group, said in an exclusive interview with the author.
On February 16, the US glass giant's new liquid crystal display (LCD) glass substrate factory in Liangjiang New District, Chongqing, was officially put into production, and began to provide its customers with glass substrates of 8.5 generations and above. This new back-end processing plant is Corning's second LCD glass substrate factory in mainland China. Previously, it invested about $800 million in a factory in Beijing with a melting, forming and post-processing capability of up to 8.5 generations of LCD glass.
According to public information, Corning was founded in 1851 and is headquartered in Corning, New York, USA, and is a supplier of special glass and ceramic materials. Corning Display Technologies' products are mainly used in glass substrates for liquid crystal display (LCD) and organic light emitting diode (OLED) displays. In 2015, Corning announced that it has invested in the construction of new 8.5-generation and 10.5-generation glass substrate plants in Chongqing and Hefei, China. As of now, Corning's total investment in mainland China has reached US$3 billion.
Ji Kebin said to the interface news that the investment is based on Corning's strong demand for LCD glass substrates in China, and the localized supply can also serve Chinese panel makers more efficiently.
According to industry data, at present, the display panel industry driven by consumer products such as flat-panel TVs and smart phones has formed a pattern of major producing areas in China, South Korea, Japan and Taiwan. As Japan's gradual decline and the Chinese Taiwanese industry are affected by factors such as the size of development, China and South Korea have begun to lead the global display panel manufacturing industry.
According to a report released by Qunzhi Consulting, which was researched in the industry chain field, in January this year, global LCD TV panel shipments reached 258 million units in 2016, although shipments fell by 2.5% compared to 2015, but China's mainland panel factory Production capacity continues to expand, and shipments are second only to South Korea, ranking second in the world.
In terms of panel makers, in 2016, BOE, Huaxing Optoelectronics and China Light and Power Panda three LCD panel shipments reached 76.73 million units, with a total market share of 30%. The shipment volume is second only to South Korea, ranking second in the world. .
Ji Kebin believes that the global display industry is still growing. Most of the growth comes from the market demand for large-size TV. As the world's largest TV market, China is already the most important LCD panel supply area in the world.
Qunzhi Consulting's report also predicts that with the gradual mass production of new production lines such as BOE and Huike in 2017, the market share of China's panel makers in the global LCD TV panel market will continue to increase steadily.
“BOE is one of our biggest customers. It is opposite the Corning plant in the panel factory in Chongqing,” said Ji Kebin. “Jingdong is now the world’s top three LCD panel makers, with the launch of the new BOE plant. Mass production of the Hefei 10.5 generation plant, BOE will become the world's largest LCD panel manufacturer."
“Opening a factory close to the customer, logistics and transportation will be simple, delivery time and stability can also be guaranteed. Especially, Corning is building a 10.5-generation glass substrate factory in Hefei, the glass size is larger, the factory is directly It is connected to the BOE factory so that it can be supplied directly by simply loading the glass in the carrying container," he said.
Because Corning's products are oversized and ultra-thin glass, both to meet quality and timely and reliable supply requirements, and not suitable for long-distance transportation, Corning's investment decisions are always based on customer needs and market needs. However, the Corning Chongqing plant was put into production at the time when the new US President Trump took office and fulfilled his "American company returning to the United States to bring manufacturing back to the United States."
Previously, a group of companies such as Foxconn announced plans to build factories in the United States, Intel also reiterated the early construction plan, which seems to indicate that the United States is receiving support from high-end manufacturing giants. In this regard, Ji Kebin said that President Trump has just taken office. Corning has a lot of places for the new government to understand and learn. It is necessary to further understand the promulgation and development of the new government laws and regulations. At present, Corning's strategy is to build factories near customers.
While building a factory to meet customer needs, Ji Kebin also revealed that Corning will support the company's R&D and innovation with stable investment to enhance the company's competitiveness. Specifically, Corning will invest 8%-10% of its sales revenue each year in research and development. Some of this funding will be used to develop new technologies and products to provide customers with new solutions; another part of the investment will be used to optimize their production processes and processes.
"In the history of Corning's over one hundred years, the company's operations are cyclical, with both rapid growth and low valleys," said Ji Kebin. "At present, Corning's display technology business is in a stage of good earnings, and we will invest the proceeds." The emerging business unit is used to support the latest technology development and capacity development to help the company's emerging business grow rapidly," he said.
According to Corning’s 2016 financial report released on January 24, Corning Display Technology’s core annual sales for 2016 were $3.6 billion and core revenues were $1 billion. For the whole year of 2016, the demand for Corning glass in the LCD glass market is growing at around 5%.
The company expects the retail market and glass demand growth rate for the full year of 2017 to be around 5%. The company expects that ShowCast's volume in the first quarter of 2017 will achieve a year-on-year growth of around 15%, and a 5% or so decrease.