Glass and optical materials giant Corning has posted a sharp uptick in quarterly sales, with demand for its optical fiber products fueled by strong growth across the communications sector.
The New York firm reported that sales from its optical communications division - largely attributable to optical fiber products - jumped 21 per cent year-on-year, to $1.08 billion. Total company sales for the period were $3.5 billion.
Sales increased in both enterprise and carrier networks, with strong momentum in 5G, fiber-to-the-home, and cloud computing continuing to drive the industry.
“No question, we're in great shape,” Corning’s CEO Wendell Weeks told an investor conference call discussing the latest figures. “And we see a clear growth story playing out across our businesses.”
Fiber footprint expanding
Commenting on the communications sector specifically, Weeks said: “We're energized by the momentum that is building in this business.”
He said that this momentum has been confirmed by multiple sources, noting that broadband usage during June 2021 was up 33 per cent on pre-pandemic levels - and even up 10 per cent on the June 2020 figure, set during a time of peak quarantine.
“Global 5G subscriptions have grown to almost 300 million and they're on track to double that by the end of 2021 according to industry projections,” added the CEO.
Customers are also making major commitments, with Weeks likening the current situation to the “early innings of a large capital deployment cycle across 5G, fiber-to-the-home, and hyperscale data centers”.
Among those customers is AT&T, whose CEO said in its recent investor call that the company expects to have expanded its fiber footprint by 3 million locations by the end of this year, including both business and consumer customers.
Similarly confident projections have been made by Deutsche Telekom, noted Weeks, while Microsoft has stated that data center capacity would need to grow quickly to cope with future demand for cloud services.
Smart phone camera optics
Beyond optical fiber, Corning is a key provider of glass for TVs, smart phones, and other consumer electronics. The firm’s displays division posted an even sharper rise in sales, with the latest quarterly total of $939 million up 25 per cent on the prior year - thanks partly to recent price increases.
“We’ve experienced the most favorable pricing environment in more than a decade,” Weeks said, also claiming that Corning’s low-cost production was enabling greater profitability than its peers.
The company recently held the official opening ceremony for its new “Gen 10.5” manufacturing facility for large-scale LCD glass substrates in Wuhan, China.
Meanwhile, Weeks told investors that Corning was now seeking to further boost its presence in consumer electronics, by enhancing the optics of smartphone cameras.
“The social media experience is centered around photos,” he explained. “Device designers are adding cameras and increasing lens size. They're also integrating more advanced capabilities, such as telephoto, wide-angle lenses, and infrared sensors.
“These features naturally increase the prominence of the lens surface area, which in turn increases the likelihood of scratches and damage.”
Corning is looking to benefit with the release of two new versions of its highly successful “Gorilla Glass” product, known as “DX” and “DX+”, for phone cameras.
“Our DX increases image quality and camera durability by providing a composite glass material that combines low reflection with scratch resistance approaching [that of] sapphire,” Weeks said. “Samsung is the first adopter.”
