| To: John Hayman who wrote (2222) | 3/26/2012 8:55:43 PM | | From: Mr. Sunshine | | | | | John, thanks, Corning must be employing a whole graduating class of lawyers. I assume the liability risk is not as drastic as it sounds, but you can bet that when those issues are resolved, even if not entirely in GLWs favor, the stock will spike as the uncertainty is removed. |
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| From: Asymmetric | 3/28/2012 9:26:24 AM | | | | | | Hon Hai's Sharp Deal Good for Corning
Corning provides glass for the plant that Hon Hai will take control of.
Sterne, Agee & Leach March 27, 2012
Hon Hai Precision Industry's stake in Sharp is a positive for Corning.
We do not think that Hon Hai's (ticker: HNHPF) investment in Japan's Sharp will change the demand outlook for liquid-crystal-display (LCD) panels. However, here are four things to highlight.
1) The Sakai City plant was designed to be Sharp's most efficient LCD panel plant in the world. We therefore believe that Sharp will be motivated to drive utilization higher at this plant relative to its others.
2) Corning (GLW) provides 100% of the glass requirements for the Sakai City plant. To the extent that utilization trends higher at the plant would be a positive for Corning.
3) From Sakai City, Corning does take some of its 10G glass and slices it into 8G glass for shipment to other panel makers. To the extent that this happens less would be a positive for Corning.
4) To the extent that Hon Hai's LCD panel purchases move in favor of Sharp Sakai City (where Corning has 100% share) and away from LG Display (where Nippon Electric Glass has dominant share and Corning has the least share) would be a positive for Corning.
Sharp announced that it will enter into a strategic partnership with Hon Hai. Sharp will issue shares to Hon Hai worth about $800 million. In exchange, Hon Hai will take half of Sharp's 93% stake in its Sakai City LCD plant. Before the investment, Sharp owned 93% of the plant, and Sony (SNE) owned 7%. After the investment, Sharp will own 46.5%, Hon Hai will own 46.5%, and Sony will own 7%. Ultimately, Hon Hai will procure up to 50% of the large-size LCD panels and LCD modules from the plant.
Sharp's LCD panel plant in Sakai City (where we visited a few weeks ago) is its state-of-the-art, flagship operation -- the newest, most environmentally friendly (LED lighting everywhere), and most efficient plant within Sharp. Co-located at the Sakai City plant are glass makers (Corning) and color filter makers (Toppan and Dai Nippon Printing). Sharp also has a solar-panel facility on-site. |
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| From: Asymmetric | 4/22/2012 11:35:53 AM | | | | | | CORNING SHAREHOLDERS MUST FEEL as if they have walked barefoot over broken glass. Since hitting a high above $23 about 12 months ago, the stock has fallen 40% to $13.84, even as the market has risen 4%.
[Note: Barrons - Vital Sign Column from Feb 18, 2012. Corning settled at $13.18 Friday. This analysis still holds]
The company operates five major divisions, but the problem is centered in the display-technologies segment, which provides almost 90% of profit. Corning (GLW) is one of the biggest suppliers of glass used in screens for notebooks, PC monitors and televisions. Its smaller specialty-materials division makes glass for smartphones, tablets and other portable devices.
The stock fell last year on a significant slowdown in the global display-glass market. Though 2011 revenue rose 19% to $7.9 billion, fourth-quarter sales dropped 9% sequentially. More importantly, quarterly gross profit margins fell to 43.7% from 47.1% in the third quarter. Worse, the company is predicting "double-digit" price declines and more margin compression in the first half of 2012 before glass prices are expected to stabilize. After that, Corning expects flat display sales and earnings through 2014.
This comes as Corning's competition has increased glass capacity while customers are tightening their inventories, due to lower retail demand for such things as TVs. In 2011, earnings—also hurt by significantly lower profits from affiliates, higher taxes, and special items—fell to $2.8 billion or $1.77 per share, from $3.6 billion or $2.25 per share, in 2010.
The bear case says it's over for Corning. In general, unit sales of TVs, which use lots of glass by area, are slowing—though sales of the biggest flat-screen TVs are still growing. Heavy competition and lower margins are a permanent part of a new industry landscape.
All the pessimism would get a better hearing here if Corning were taking this lying down. It isn't. Corning is already cutting display capacity by 25%. And with demand for smartphones and tablets growing nicely, the company will be well-served by its R&D leadership in many of the industries in which it competes.
It has other levers to reduce shareholder pain. Higher dividend payouts—Corning yields 2.2%—and increased share buybacks are on the way.
While the shares probably will have a rocky first half, most of the risks appear to be already in the stock, which trades at a price/earnings ratio of nine. Even with earnings at $1.25 a share—a 10% haircut to the current 2012 consensus analyst estimate of $1.40—Corning trades at less than 11 times. On that and other valuation metrics, the stock is closer to historic lows than highs.
Corning is an industrial firm, but its shares trade like bank stocks these days— at less than tangible book value. The company's ratio of debt to total capital is 10%, which gives it flexibility and a strong edge against competitors. Meanwhile, Corning holds cash equal to nearly 30% of its stock-market value.
"I'm encouraged by the way they are handling the challenge," says James Hardesty, of Hardesty Capital Management, which owns Corning shares. Capital spending will be cut dramatically, by about $600 million, to $1.2 billion to $1.3 billion next year. And at less than book value, any share buybacks will be "automatically accretive to earnings."
Another Corning fan, Alan Lancz, who runs Alan B. Lancz & Associates, expects two more quarters of weakness, and advises investors to capitalize on them by buying shares. Lancz began adding shares to his firm's holdings in early February. As Apple and other smartphone and tablet makers introduce new products, Corning's momentum will build, he contends. Lancz looks for the stock to be in the $20s again in two to three years.
This seems like a good entry point for patient investors with a horizon of one year or more. As Corning works its way out of this jam, investors will get more comfortable with the company, and its stock will rebound. |
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| From: Asymmetric | 6/10/2012 7:37:38 PM | | | | | | Raise a Glass to Corning
By STEVEN M. SEARS / Barrons / June 9, 2012
The company's revolutionary new product—flexible glass—and its low stock price make it a good candidate for selling puts.
Last Monday at an obscure trade show in Boston, Corning engineers announced they had developed flexible glass.
Willow Glass, as Corning calls its invention, is about as thick as a sheet of copy paper. It bends like plastic. A picture on Corning's Website shows a green-gloved hand bending Willow Glass into the shape of an upside-down U.
The malleability, and thinness, of the glass means it most likely will be used to make smartphones and tablets thinner and lighter. The glass can even be wrapped around devices or structures. Already, Corning's Gorilla Glass is used in 750 million devices, including the Galaxy S III smartphone from Samsung (005930.Korea). Apple's (AAPL) iPhones also reportedly use Gorilla Glass. Maybe Corning's customers will use Willow Glass in new devices.
ALTERING THE BASIC NATURE of glass seems like an epic milestone with limitless possibilities. Yet Corning's stock (ticker: GLW) has barely budged since the news was released at the Society for Information Display's meeting in Boston. The yawn shows how little investors think of Corning. Shares are down 3% in the past month, and down 30% in the past year.
The possibilities of Willow Glass, coupled with Corning's somnolent stock price, are alluring. It could take several years for the Willow Glass investment thesis to blossom, but the risk is mitigated by the stock's 2.4% dividend yield. The dividend is dependable. It could be increased.
At around $13, Corning's stock is so inexpensive that it can easily be bought by almost anyone. But investors can enhance the purchase by selling puts.
With the stock at $12.83, investors could sell Corning's January $12.50 put to collect $1.31. If the stock slides below $12.50, and the stock was put to investors, they would buy it at an effective price of $11.19. The stock's 52-week low of $11.51 was set last October. If the stock advances, the money received for selling the put can be kept.
Corning is involved, however, in other businesses besides its so-called display technologies operation, and poor performance in any of those could sour the stock. In 2011, display technologies represented 40% of Corning's sales, even though it is the largest of the company's five main business units. And the unit has some major competitors, including Asahi Glass (ASGLY), Nippon Electric Glass (5214.Japan) and AvanStrate (5220.Japan).
BUYING A STOCK WITH GOOD prospects at a low price always seems attractive. The risk never seems great—but this trade has risks. If Corning's shares turn sharply lower, anyone who sold the put is buying the stock at the put's $12.50 strike price even if the stock is at $5. In January, Corning's stock slid sharply when fourth-quarter earnings revealed glass prices declined.
Business seems to be improving, or at least stabilizing, based on late April's first-quarter earnings. Corning is expected to report earnings July 22, which could provide an important opportunity to highlight how Willow Glass represents a new chapter for the company and smartphones, TVs, and tablets like Apple's iPad.
Even if the Willow Glass trade thesis proves wrong, the sting is offset by Corning's 2.2% dividend yield. In essence, investors can park cash in a relatively low-risk stock whose yield exceeds the 10-Year-Treasury's 1.5%.
Should Corning disappoint investors yet again, shareholders probably will pressure management to use its $3.7 billion cash pile to increase the dividend and buy back shares. The cash equals about 19% of the company's $19.5 billion market capitalization, and spending just a fraction of the cash pile could convince almost any investor that Corning's glass is half full.
>>>>>>>>>>>>>>>>>>>>>>>>
Willow Glass: ultra-thin glass can 'wrap' around devices
BBC News / June 5, 2012
bbc.com
The new glass could be both for rigid and flexible displays
A new type of flexible ultra-thin glass has been unveiled by the firm that developed Gorilla Glass, currently used to make screens of many mobile devices.
Dubbed Willow Glass, the product can be "wrapped" around a device, said the New York-based developer Corning.
The glass was showcased at the Society for Information Display's Display Week, an industry trade show in Boston.
Besides smartphones, it could also be used for displays that are not flat, the company said.
But until such "conformable" screens appear on the market, the glass could be used for mobile devices that are constantly becoming slimmer.
"Displays become more pervasive each day and manufacturers strive to make both portable devices and larger displays thinner," said Dipak Chowdhury, Willow Glass programme director at Corning.
The prototype demonstrated in Boston was as thin as a sheet of paper, and the company said that it can be made to be just 0.05mm thick - thinner than the current 0.2mm or 0.5mm displays.
The firm has already started supplying customers developing new display and touch technology with samples of the product.
Next-gen gorilla glass?
The material used to make Willow Glass is the result of the firm's glassmaking process called Fusion.
The technique involves melting the ingredients at 500C, and then producing a continuous sheet that can be rolled out in a mechanism similar to a traditional printing press.
Corning unveiled Gorilla Glass 2 at CES this year, saying that it will make screens thinner
This roll-to-roll method is much easier and faster for mass production than the sheet-to-sheet process normally used to make super-thin glass, the firm said.
In future, Willow Glass may replace the already widely-used Gorilla Glass, found on many smartphones and tablets.
At this year's CES trade show in Las Vegas, Corning unveiled Gorilla Glass 2, said to be 20% thinner than the original product but with the same strength.
The first-generation of Gorilla Glass, launched in 2007, has so far been used on more than 575 products by 33 manufacturers - covering more than half a billion devices worldwide.
It was first spotted by the Apple founder Steve Jobs, who contacted Corning when the firm was developing the screen for its first iPhone in 2006.
Other developments
Willow Glass is not the first attempt to produce a futuristic flexible display.
During the past few years, scientists around the world have been working with a material called graphene, first produced in 2004 - a super-conductive form of carbon made from single-atom-thick sheets.
Canadian and US researchers developed prototype of a flexible smartphone in 2011
In a past interview with the BBC, a researcher from Cambridge University, Prof Andrea Ferrari, said that prototypes of flexible touchscreens made out of graphene have already been developed - and that besides being ultra strong and flexible, in future such displays could even give the user "sensational" feedback.
"We went from physical buttons to touch screens, the next step will be integrating some sensing capabilities," said Prof Ferrari.
"Your phone will be able to sense if you're touching it, will sense the environment around - you won't have to press a button to turn it on or off, it will recognise if you're using it or not."
In a separate project, scientists from the Human Media Lab at Queen's University, Canada, and Arizona State University's Motivational Environments Research group, created a millimetres-thick prototype flexible smartphone in 2011, made of a so-called electronic paper.
The scientists said they used the same e-ink technology as found in Amazon's Kindle e-book reader, bonded to flex sensors and a touchscreen that interpreted drawings and text written on it.
"This computer looks, feels and operates like a small sheet of interactive paper," said one of the researchers, Dr Roel Vertegaal.
"You interact with it by bending it into a cell phone, flipping the corner to turn pages, or writing on it with a pen." |
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| To: Jim Greif who wrote (2229) | 10/6/2012 2:13:15 PM | | From: Mad2 | | | | Nice article about GLW in Barrons today, citing their 20% dividend increase and expected Qtr/qtr growth in revenue.
Their annual dividend of .36/share provides a 2.7% return based on Fridays close.
While they are still dependent on display glass, they have good potential upside in solar, health science and building materials (Dow-Corning JV)
Weeks is committed to increasing revenue from current 8 bil to 10 bil in 3 yrs.
At a trailing p/e of less than 10 this one is a no brainer.
Bottom is in.
BTW if as mentioned in Wed's debate Corp taxes get lowered to 25% that will provide additional gas to GLW and other blue chip stocks.
mad2
Barrons | SATURDAY, OCTOBER 6, 2012
Corning's Glass: Set to Sparkle By STEVEN M. SEARS
The options market is skeptical about the glass maker, but as an earnings report looms, the skeptical outlook merits its own skepticism. Also, pending super options may dent NYSE Euronext and Nasdaq OMX.
Corning declared a 20% increase last week in its quarterly common-stock dividend. The move should help secure the company's recently strong stock gains.
Corning (GLW) is up 12% in the past month, about three times the rise in the Standard & Poor's 500 index. We've liked the stock since June when we learned Corning had introduced Willow glass, a flexible substance that can be wrapped around objects and devices. Now Corning is preparing to report third-quarter earnings Oct. 24, and there is reason to be skeptical of the options market's skepticism.
Goldman Sachs analyst Simona Jankowski expects the company to report its first year-over-year sales growth in four quarters and first earnings-per-share gain in eight quarters.
Yet, the implied volatility of Corning's bearish put prices is elevated, reflecting investor concern that the shares will decline on the earnings report. In contrast, Corning's bullish call options, which increase in value if the stock rises, are inexpensive.
The skepticism creates opportunities for investors to sell bearish puts to position themselves to buy the stock at a lower price, and to buy bullish calls to participate in a potential earnings-led advance.
The fundamentals of liquid-crystal displays, used in flat-screen televisions, computer monitors, and the like are believed to be improving, if for no other reason than that LCD glass and panel makers are getting smarter about managing supply, which helps mitigate demand, or the lack thereof. Weak LCD fundamentals are a primary reason why Corning's stock shed 4% of its value in the past three years, as the S&P 500 rose 51%.
With Corning's stock at $13.38, Goldman Sachs' derivatives strategists are telling clients to buy the November $14 calls, recently at 30 cents, in anticipation that the stock will rise 7.2% on earnings. Aggressive investors who want to build a position in Corning should complement the call trade with a put sale. Premiums in near-month puts aren't high, but selling Corning's November $13 put for 49 cents looks reasonable. If the stock dips below $13, you own it, which isn't an unpleasant outcome. |
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| From: Asymmetric | 10/10/2012 1:22:21 AM | | | | | | Glass Works: How Corning Created the Ultrathin, Ultrastrong Material of the Future
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By Bryan Gardiner / Wired Magazine September 24, 2012
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Molten glass cools to become so gummy it can be cut with scissors.
Don Stookey knew he had botched the experiment. One day in 1952, the Corning Glass Works chemist placed a sample of photosensitive glass inside a furnace and set the temperature to 600 degrees Celsius. At some point during the run, a faulty controller let the temperature climb to 900 degrees C. Expecting a melted blob of glass and a ruined furnace, Stookey opened the door to discover that, weirdly, his lithium silicate had transformed into a milky white plate. When he tried to remove it, the sample slipped from the tongs and crashed to the floor. Instead of shattering, it bounced.
The future National Inventors Hall of Fame inductee didn’t know it, but he had just invented the first synthetic glass-ceramic, a material Corning would later dub Pyroceram. Lighter than aluminum, harder than high-carbon steel, and many times stronger than regular soda-lime glass, Pyroceram eventually found its way into everything from missile nose cones to chemistry labs. It could also be used in microwave ovens, and in 1959 Pyroceram debuted as a line of space-age serving dishes: Corningware.
The material was a boon to Corning’s fortunes, and soon the company launched Project Muscle, a massive R&D effort to explore other ways of strengthening glass. A breakthrough came when company scientists tweaked a recently developed method of reinforcing glass that involved dousing it in a bath of hot potassium salt. They discovered that adding aluminum oxide to a given glass composition before the dip would result in remarkable strength and durability. Scientists were soon hurling fortified tumblers off their nine-story facility and bombarding the glass, known internally as 0317, with frozen chickens. It could be bent and twisted to an extraordinary degree before fracturing, and it could withstand 100,000 pounds of pressure per square inch. (Normal glass can weather about 7,000.) In 1962 Corning began marketing the glass as Chemcor and thought it could work for products like phone booths, prison windows, and eyeglasses.
Yet while there was plenty of initial interest, sales were slow. Some companies did place small orders for products like safety eyeglasses. But these were recalled for fear of the potentially explosive way the glass could break. Chemcor seemed like it would make a good car windshield too, and while it did show up in a handful of Javelins, made by American Motors, most manufacturers weren’t convinced that paying more for the new muscle glass was worth it—especially when the laminated stuff they’d been using since the ’30s seemed to work fine.
Corning had invented an expensive upgrade nobody wanted. It didn’t help that crash tests found that “head deceleration was significantly higher” on the windshields—the Chemcor might remain intact, but human skulls would not.
After pitches to Ford Motors and other automakers failed, Project Muscle was shut down and Chemcor was shelved in 1971. It was a solution that would have to wait for the right problem to arise.
When glass is hardened and strengthened it can withstand huge amounts of force from a lever press.
From above, Corning’s headquarters in upstate New York looks like a Space Invaders alien: Designed by architect Kevin Roche in the early ’90s, the structure fans out in staggered blocks. From the ground, though, the tinted windows and extended eaves make the building look more like a glossy, futuristic Japanese palace.
The office of Wendell Weeks, Corning’s CEO, is on the second floor, looking out onto the Chemung River. It was here that Steve Jobs gave the 53-year-old Weeks a seemingly impossible task: Make millions of square feet of ultrathin, ultrastrong glass that didn’t yet exist. Oh, and do it in six months. The story of their collaboration—including Jobs’ attempt to lecture Weeks on the principles of glass and his insistence that such a feat could be accomplished—is well known.
How Corning actually pulled it off is not.
Weeks joined Corning in 1983; before assuming the top post in 2005, he oversaw both the company’s television and specialty glass businesses. Talk to him about glass and he describes it as something exotic and beautiful—a material whose potential is just starting to be unlocked by scientists. He’ll gush about its inherent touchability and authenticity, only to segue into a lecture about radio-frequency transparency. “There’s a sort of fundamental truth in the design value of glass,” Weeks says, holding up a clear pebble of the stuff. “It’s like a found object; it’s cool to the touch; it’s smooth but has surface to it. What you’d really want is for this to come alive. That’d be a perfect product.”
Weeks and Jobs shared an appreciation for design. Both men obsessed over details. And both gravitated toward big challenges and ideas. But while Jobs was dictatorial in his management style, Weeks (like many of his predecessors at Corning) tends to encourage a degree of insubordination. “The separation between myself and any of the bench scientists is nonexistent,” he says. “We can work in these small teams in a very relaxed way that’s still hyperintense.”
Indeed, even though it’s a big company—29,000 employees and revenue of $7.9 billion in 2011—Corning still thinks and acts like a small one, something made easier by its relatively remote location, an annual attrition rate that hovers around 1 percent, and a vast institutional memory. (Stookey, now 97, and other legends still roam the halls and labs of Sullivan Park, Corning’s R&D facility.) “We’re all lifers here,” Weeks says, smiling. “We’ve known each other for a long time and succeeded and failed together a number of times.”
One of the first conversations between Weeks and Jobs actually had nothing to do with glass. Corning scientists were toying around with microprojection technologies—specifically, better ways of using synthetic green lasers. The thought was that people wouldn’t want to stare at tiny cell phone screens to watch movies and TV shows, and projection seemed like a natural solution. But when Weeks spoke to Jobs about it, Apple’s chief called the idea dumb. He did mention he was working on something better, though—a device whose entire surface was a display. It was called the iPhone.
Jobs may have dismissed green lasers, but they represented the kind of innovation for innovation’s sake that defines Corning. So strong is this reverence for experimentation that the company regularly invests a healthy 10 percent of its revenue in R&D. And that’s in good times and in bad. When the telecom bubble burst in 2000 and cratering fiber-optic prices sent Corning’s stock from $100 to $1.50 per share by 2002, its CEO at the time reassured scientists that not only was Corning still about research but that R&D would be the path back to prosperity.
“They’re one of the very few technology-based firms that have been able to reinvent themselves on a regular basis,” says Rebecca Henderson, a professor at Harvard Business School who has studied Corning’s history of innovation. “That’s so easy to say, and it is so hard to do.” Part of that success lies in the company’s ability not only to develop new technologies but to figure out how to make them on a massive scale. Still, even when Corning succeeds at both, it can often take the manufacturer decades to find a suitable—and profitable enough—market for its innovations. As Henderson notes, innovation at Corning is largely about being willing and able to take failed ideas and apply them elsewhere.
Glass starts out as a mixture of very fine powders like limestone, sand, and sodium borate.
Photo: Max Aguilera-Hellweg
The idea to dust off the Chemcor samples actually cropped up in 2005, before Apple had even entered the picture. Motorola had recently released the Razr V3, a flip phone that featured a glass screen in lieu of the typical high-impact plastic. Corning formed a small group to examine whether an 0317-like glass could be revived and applied to devices like cell phones and watches. The old Chemcor samples were as thick as 4 millimeters. But maybe they could be made thinner. After some market research, executives believed the company could even earn a little money off this specialty product. The project was codenamed Gorilla Glass.
By the time the call from Jobs came in February 2007, these initial forays hadn’t gotten very far. Apple was suddenly demanding massive amounts of a 1.3-mm, chemically strengthened glass—something that had never been created, much less manufactured, before. Could Chemcor, which had never been mass-produced, be married to a process that would yield such scale? Could a glass tailored for applications like car windshields be made ultrathin and still retain its strength? Would the chemical strengthening process even work effectively on such a glass? No one knew. So Weeks did what any CEO with a penchant for risk-taking would do. He said yes.
For a material that’s so familiar as to be practically invisible, modern industrial glass is formidably complex. Standard soda-lime glass works fine for bottles and lightbulbs but is terrible for other applications, because it can shatter into sharp pieces. Borosilicate glass like Pyrex may be great at resisting thermal shock, but it takes a lot of energy to melt it.
At the same time, there are really only two ways to produce flat glass on a large scale, something called fusion draw and the float glass process, in which molten glass is poured onto a bed of molten tin. One challenge a glass company faces is matching a composition, with all its desired traits, to the manufacturing process. It’s one thing to devise a formula. It’s another to manufacture a product out of it.
Corning is working on new flexible glass formulations that will ship on spools.
Photo: Max Aguilera-Hellweg
Regardless of composition, the main ingredient in almost all glass is silicon dioxide (aka sand). Because it has such a high melting point (1,720 degrees C), other chemicals, like sodium oxide, are used to lower the melting temperature of the mixture, making it easier to work with and cheaper to produce. Many of these chemicals also happen to imbue glass with specific properties, such as resistance to x-rays, tolerance for high temperatures, or the ability to refract light and disperse colors. Problems arise, though, when the composition is changed; the slightest tweak can result in a drastically different material. Throwing in a dense element like barium or lanthanum, for example, will decrease the melting temperature, but you risk not getting a homogeneous mixture. And maxing out the overall strength of a glass means you’re also making that glass more likely to fracture violently when it does fail. Glass is a material ruled by trade-offs. This is why compositions, particularly those that are fine-tuned for a specific manufacturing process, are fiercely guarded secrets.
One of the pivotal steps in glassmaking is the cooling. In large-scale manufacturing of standard glass, it’s essential for the material to cool gradually and uniformly in order to minimize the internal stresses that would otherwise make it easier to break. This is called annealing.
The goal with tempered glass, however, is to add stress between the inner and outer layer of the material. This, paradoxically, can make the glass stronger: Heat a sheet of glass until it softens, then rapidly cool, or quench, its outer surfaces. This outside shell quickly contracts while the inside remains molten. As the center of the glass cools, it tries to contract, pulling on the outer shell. A zone of tension forms in the center, while the outer surfaces are even more tightly compressed. Tempered glass will eventually break if you chip through this toughened outer compressive layer into the zone of tension. But even thermal tempering has its limits. The amount of strengthening you can achieve is dependent on how much the glass contracts upon cooling, and most compositions will shrink only modestly.
The interplay between compression and tension is best demonstrated by something called a Prince Rupert’s drop. Formed by dripping globs of molten glass into ice water, the quickly cooled and compressed heads of these tadpole-shaped droplets can withstand massive amounts of punishment, including repeated hammer blows. The thin glass at the end of the tail is more vulnerable, however, and if you break it the fracture will propagate through the drop at 2,000 miles per hour, releasing the inner tension. Violently. In some cases, a Prince Rupert’s drop can explode with such force that it will actually emit a flash of light.
Chemical strengthening, the method of fortifying glass developed in the ’60s, creates a compressive layer too, through something called ion exchange. Aluminosilicate compositions like Gorilla Glass contain silicon dioxide, aluminum, magnesium, and sodium. When the glass is dipped in a hot bath of molten potassium salt, it heats up and expands. Both sodium and potassium are in the same column on the periodic table of elements, which means they behave similarly. The heat from the bath increases the migration of the sodium ions out of the glass, and the similar potassium ions easily float in and take their place. But because potassium ions are larger than sodium, they get packed into the space more tightly. (Imagine taking a garage full of Fiat 500s and replacing most of them with Chevy Suburbans.) As the glass cools, they get squeezed together in this now-cramped space, and a layer of compressive stress on the surface of the glass is formed. (Corning ensures an even ion exchange by regulating factors like heat and time.)Compared with thermally strengthened glass, the “stuffing” or “crowding” effect in chemically strengthened glass results in higher surface compression (making it up to four times as strong), and it can be done to glass of any thickness or shape.
Engineers at Corning use an array of torture devices to test the limits of its products.
Photo: Max Aguilera-Hellweg
By the end of March, Corning was closing in on its formula. But the company also needed to manufacture it. Inventing a new manufacturing process was out of the question, as that could take years. To meet Apple’s deadline, two of Corning’s compositional scientists, Adam Ellison and Matt Dejneka, were tasked with figuring out how to adapt and troubleshoot a process the company was already using. They needed something capable of spitting out massive quantities of thin, pristine glass in a matter of weeks.
There was really only one choice: fusion draw. In this technique, molten glass is poured from a tank into a trough called an isopipe. The glass overflows on each side, then the two streams rejoin under the isopipe. It’s drawn down at a prescribed rate by rollers to form a continuous sheet. The faster it’s drawn, the thinner the glass.
Corning’s one fusion-capable factory in the US is in Harrodsburg, Kentucky. In early 2007, that plant’s seven 15-foot-tall tanks were going full blast, each churning out more than 1,000 pounds per hour of sold-out LCD glass for TV panels. One tank could meet Apple’s initial request. But first the old Chemcor compositions had to be reformulated. The glass not only needed to be 1.3 mm now, it also had to have better visual characteristics than, say, a pane in a telephone booth.
Ellison and his team had six weeks to nail it. To be compatible with the fusion process, the glass also needed to be extra stretchy, like chewing gum, at a fairly low temperature. The problem was, anything you do to increase a glass’s gooeyness also tends to make it substantially more difficult to melt. By simultaneously altering seven individual parts of the composition—including changing the levels of several oxides and adding one new secret ingredient—the compositional scientists found they were able to ramp up the viscosity while also producing a finely tuned glass capable of higher compressive stress and faster ion exchange. The tank started in May 2007. By June, it had produced enough Gorilla Glass to cover seven football fields.
In just five years, Gorilla Glass has gone from a material to an aesthetic—a seamless partition that separates our physical selves from the digital incarnations we carry in our pockets. We touch the outer layer and our body closes the circuit between an electrode beneath the screen and its neighbor, transforming motion into data. It’s now featured on more than 750 products and 33 brands worldwide, including notebooks, tablets, smartphones, and TVs. If you regularly touch, swipe, or caress a gadget, chances are you’ve interacted with Gorilla.
Corning’s revenue from the glass has skyrocketed, from $20 million in 2007 to $700 million in 2011. And there are other uses beyond touchscreens. At this year’s London Design Festival, Eckersley O’Callaghan—the design firm responsible for some of Apple’s most iconic stores—unveiled a serpentine-like glass sculpture made entirely from Gorilla Glass. It may even end up on windshields again: The company is in talks to install it in future sports car models.
Today, two yellow robotic arms grab 5-foot-square panels of Gorilla Glass with special residue-limiting suction cups and place them in wooden crates. From Harrodsburg, these crates are trucked to Louisville and loaded on a westbound train. Once they hit the coast, the sheets get loaded onto freight ships for their eventual date at one of Corning’s “finisher” facilities in China, where they get their molten potassium baths and are cut into touchable rectangles.
Of course, for all its magical properties, a quick scan of the Internet will reveal that Gorilla Glass does fail, sometimes spectacularly so. It breaks when phones are dropped, it spiders if they bend, it cracks when they’re sat on. Gorilla Glass is, after all, glass. Which is why a small team at Corning spends a good portion of the day smashing the hell out of the stuff.
“We call this a Norwegian hammer,” says Jaymin Amin, pulling a metal cylinder out of a wooden box. The tool is usually wielded by aircraft engineers to test the sturdiness of a plane’s aluminum fuselage. But Amin, who oversees all new glass development in the Gorilla family, pulls back the spring-loaded impact hammer and releases 2 joules of impact energy onto a 1-mm-thick piece of glass, enough to put a big dent in a block of wood. Nothing happens.
The success of Gorilla Glass presents some unique challenges for Corning. This is the first time the company has faced the demands of such rapid iteration: Each time a new version of the glass is released, the way it performs in the field has to be monitored for reliability and robustness. To that end, Amin’s team collects hundreds of shattered Gorilla Glass phones. “Almost all breakage, whether it’s big or small, begins at one spot,” says senior research scientist Kevin Reiman, pointing to a nearly invisible chip on an HTC Wildfire, one of a handful of crunched phones on the table in front of him. Once you actually locate that spot, you can start to measure the crack to get an idea of how the tension was applied to the glass; if you can reproduce a break, you can study how it propagated and attempt to prevent it, either compositionally or through chemical strengthening.
Armed with this information, the rest of the group jumps in to re-create that precise kind of failure over and over. They use lever presses; drop testers with granite, concrete, and asphalt surfaces; free gravity ball drops; and various industrial-looking torture devices armed with an arsenal of diamond tips. There’s even a high-speed camera capable of filming at 1 million frames per second to study flexure and flaw propagation.
All this destruction and controlled mayhem has paid off. Compared with the first version of the glass, Gorilla Glass 2 is 20 percent stronger (a third version is due out early next year).
The Corning composition scientists have accomplished this by pushing the compressive stress to its limit—they were being conservative with the first version of Gorilla—while managing to avoid the explosive breakage that can come with that increase. Still, glass is a brittle material. And while brittle materials tend to be extremely strong under compression, they’re also extremely weak under tension: If you bend them, they can break.
The key to Gorilla Glass is that the compression layer keeps cracks from propagating through the material and catastrophically letting tension take over. Drop a phone once and the screen may not fracture, but you may cause enough damage (even a microscopic nick) to critically sap its subsequent strength. The next drop, even if it isn’t as severe, may be fatal. It’s one of the inevitable consequences of working with a material that is all about trade-offs, all about trying to create a perfectly imperceptible material.
Back at the Harrodsburg plant, a man wearing a black Gorilla Glass T-shirt is guiding a 100-micron-thick sheet of glass (about the thickness of aluminum foil) through a series of rollers. The machine looks like a printing press, and appropriately, the glass that comes off it bends and flexes like a giant glimmering sheet of transparent paper. This remarkably thin, rollable material is called Willow. Unlike Gorilla Glass, which is meant to be used as armor, Willow is more like a raincoat. It’s durable and light, and it has a lot of potential. Corning imagines it will facilitate flexible smartphone designs and uber-thin, roll-up OLED displays. An energy company could also use Willow for flexible solar cells. Corning even envisions ebooks with glass pages.
Eventually, Willow will ship out on huge spools, like movie reels, each holding up to 500 feet of glass. That is, once someone places an order. For now, rolls of glass sit on the Harrodsburg factory floor, a solution waiting for the right problem to arise.
Bryan Gardiner (bgardiner@gmail.com) also writes about anatomical models made of borosilicate in this issue. |
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| From: John Hayman | 10/24/2012 8:01:11 AM | | | | | | | NEW YORK (MarketWatch) -- Corning Inc. said on Wednesday that it earned $521 million, or 35 cents a share in the third quarter, compared to $462 million, or 30 cents a share a year ago. Sales in the quarter rose to $2.04 billion, from $1.91 billion a year ago. Analysts polled by FactSet Research had expected the glass company to earn 32 cents a share on revenue of $2.02 billion. |
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| From: Asymmetric | 2/11/2014 10:10:49 AM | | | | | | Corning Up Against a Glass Ceiling
Susquehanna says the glass and ceramics giant is hampered by price trends.
Corning (GLW: NYSE)
By Susquehanna Financial Group ($18.36, Feb. 10, 2014)
Following last Friday's analyst day, we believe Corning is positioned well for new growth opportunities. However, we remain on the sideline at the current share price given the glass-pricing trends and lack of upside to calendar 2014 earnings-per-share estimate.
Corning (ticker: GLW) held its annual investor meeting on Friday, Feb. 7, in New York City during which the company discussed its next-growth drivers including Willow glass (for flexible display app), new application for its Gorilla cover glass (while also arguing Sapphire is not a threat), Antimicrobial cover glass, and the Wireless Optical Distributed Antenna System (DAS).
In addition, Corning stated its key objectives for its main Display business, including bringing average sale price (ASP) decline to average trend line (by spring time frame), and better margin profile following the acquisition of Samsung's share in their joint venture. The company currently expects glass ASPs to decline at a higher-than-normal rate in the first quarter, but is optimistic to see the decline to return to moderate rate in the second.
Nonetheless, we currently see limited upside to our calendar 2014 EPS estimate of $1.42 versus consensus $1.45, and thus remain on the sideline at current share price.
We rate Corning at Neutral. Downside risk is $12, or 1.5 times forward enterprise value/sales to reflect a downturn.
In the Display business unit (33% of total fiscal 2013 revenue, accounting for 70%-plus of overall net-operating profit after tax (Nopat)): 1) stabilizing its Display business is Corning's key objective for FY14; 2) expect higher-than-normal glass ASP decline in the first quarter, but quarter-over-quarter ASP decline could return to normal trends by the second quarter; 3) competitors shutting down old glass capacities will positively impact glass supply/demand environment in the second-half of calendar 2014; 4) expect Lotus glass to capture growth in high-performance display (HPD) market, which is projected to grow at 35% compounded-annualized-growth rate (CAGR) from 2013 to 2017; 5) expect Willow glass to be finally commercialized for flexible displays application in the second-half of calendar 2014.
In Specialty Material, including Gorilla cover glass (15% of total revenue, 10% of overall Nopat): 1) expect Gorilla to return to growth in calendar 2014; 2) expect further cost reduction here to help improve margin profile; 3) Gorilla is adopted by automakers such as BMW, and Corning expects to expand into airplane and train markets; 4) near-term growth drivers for Gorilla are the increasing numbers of touch devices and larger average touchscreen size; 5) Corning does not expect much challenge from Sapphire since the company believes Gorilla is superior in performance, cost and weight; 6) new antimicrobial cover glass is a new and incremental growth driver.
In Optical Solutions (30% of total revenue, 10% of overall Nopat): 1) Corning's new revenue driver of One Wireless Optical DAS could capture the potential opportunity in the commercial building in the U.S.; 2) cloud computing, big data, data centers are driving demand for optical solutions; 3) Corning expects fiscal 2014 segment sales and profit of more than two times the telecom industry capital-expenditure rate.
In Environmental (12% of total revenue, 7% of overall Nopat): 1) several demand drivers are new regulations in China and EU could drive demand for regulated heavy-duty autos at 15%-20% CAGR until 2017 and, in North America, LEVII and Tier 3 regulations require 75% reduction in emission, and the new gasoline direct injection (GDI) engines require new filters that have a market size of $1 billion; 2) Corning expects Environmental gross margin to improve.
In Life Sciences (11% of total revenue, 4% of overall Nopat): 1) Corning expects double-digit profit growth here in calendar 2014 to reach $900 million (above our estimate of up 4% year-over-year); 2) the growth here is driven by increased content, e.g., per $1,000 in drug sales, Corning's potential sales is $33; 3) Life Sciences has provided relatively good returns given its low capital expenditures and research-and-development spending requirement; 4) Corning has no plan to spin-off Life Sciences. |
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| From: Asymmetric | 3/9/2014 3:28:26 PM | | | | | | Corning Stock Should Keep Grinding Higher
By STEVEN M. SEARS / Barrons March 6, 2014
The shares are a bet on wearable technology; this options trade boosts your return as the stock climbs.
A funny thing keeps happening to Corning : The stock continues to climb even though the company is as appealing to many investors as dinner with an IRS agent.
On Wednesday, the stock (ticker: GLW) rose to a 52-week high of $19.82 in the absence of any real news other than a day-old story about an accelerated share-buyback program.
This stock has been a favorite of the Striking Price since June 2012 when the stock traded around $13 and the company had just announced Willow Glass, an ultrathin, flexible product that bends like plastic. Since then, the stock has advanced some 53% amid widespread investor skepticism.
The stock has advanced despite a consensus view on Wall Street that Corning's dominant display business line, which accounts for about 33% of total fiscal 2013 revenue, was a major drag due to pricing troubles. Everyone already owns a flat-screen TV.
In the options market, where traders express their view of the future, trading patterns indicate expectations that Corning will set higher highs in the stock market.
The most widely owned contract is Corning's January $22 call that expires in 2016. That the May $19 put and May $20 put are the next most widely held positions is evidence that enough skepticism toward Corning's future still exists despite the rally. This is good.
If everyone agreed Corning's stock was the place to be, the stock would probably lose steam. Why? Because investors tend to go all in when they like a stock, and there's no money left to fuel further gains.
If you believe in wearable technology, which Corning's Willow Glass makes possible, it is not too late to still establish a position.
With the stock at $19.65, investors can sell Corning's August $18 put for 68 cents. If the stock dips below $18, investors are obligated to buy the stock or pay top-dollar to buy the put. Investors who want to build a position in the stock can buy the stock and sell the put.
Of course, it is hard to overlook the shadow Corning's display business casts over the company, but the stock keeps grinding higher, and that is a fact that is even harder to ignore. |
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