Corning, one of the world’s largest manufacturers of optical fiber, glass, and high-spec components, says demand for its optical connectivity products used in generative artificial intelligence (AI) has provided an unexpectedly large boost to recent sales.
In a July 8 update that sent the NYSE-listed company’s stock price up in value by more than 10 per cent, long-time CEO Wendell Weeks said that revenues in the June quarter would now be approximately $3.6 billion - up from the prior estimate of $3.4 billion.
“We expect second-quarter core sales to exceed our previous guidance and mark a return to year-over-year growth,” he said. “The outperformance was primarily driven by the strong adoption of our new optical connectivity products for generative AI.”
Compact cables
That boom in demand echoes an industry trend that has already been apparent for several months among providers of high-speed optical transceivers such as Lumentum and Coherent.
Corning has said previously that the explosion of interest in generative AI would translate to increased demand for passive optical links and novel co-packaged optics solutions.
Speaking during the J.P. Morgan 52nd Annual Global Technology, Media and Communications Conference that took place at the end of May, Weeks said:
“Everybody talks about power in generative AI, and it is true. It uses a lot more power. If you look at the world through glass eyes, like us, what you see is that you use a lot more fiber optics for any given amount of power to do generative AI; five to ten times as much.”
The resulting need for hundreds of individual optical fibers to link processors and servers in data centers has led Corning to come up with new designs of fiber, cables, and connectors that are much more compact than previous generations of the technology.
One example Corning’s 190 µm “SMF-28 Contour” fiber, which is 20 per cent smaller than earlier versions, alongside new MMC connectors said to increase the fiber density in a housing by up to three times.
Embedded waveguides
According to a recent blog post from Corning demand for artificial intelligence represents a genuine game-changer for data centers, with new network architectures demanding a step change in passive optical content.
Weeks also outlined future developments, saying: “The rise of generative AI is driving the potential for our ‘Fusion’ technology to bring flat, pristine, highly stable glass, initially as a substrate for GPUs, and in the near future, that substrate to become embedded with optical waveguides for co-packaged optics.”
Another recent Corning presentation suggests that GPU-based parallel computing will require more than ten times as much optical fiber for generative AI, when compared with traditional cloud networks occupying the same space.
Fusion refers to a fully mechanized manufacturing process where molten glass is continually drawn without contacting any other solid surfaces, to form extremely thin sheets of material with a high-quality surface area - typically used in displays.
• The uptick prompted by Corning's updated guidance means that the firm's stock price is now trading at close to its highest level in more than two decades, and equivalent to a market capitalization $40 billion.
Weeks and his executive team are scheduled to report full details of the firm’s Q2 2024 financial results on July 30.
