Corning opens China LCD site, eyes rapid growth

By Jason Subler

BEIJING, March 28 (Reuters) - Specialty glass maker Corning Inc (GLW.N) opened its first LCD glass plant in China on Friday, saying it plans to continue to expand capacity to keep up with growing demand for LCD displays in the country.

The plant, based in Beijing, adds to existing LCD glass facilities in the United States, Japan, South Korea and Taiwan.

It will produce glass for thin-film transistor liquid-crystal displays (TFT-LCDs), used in products such as flat-screen computer monitors and televisions. It will initially focus on finishing glass, not the full process of melting.

James Clappin, president of Corning's Display Technologies unit, told Reuters ahead of an opening ceremony that the Corning, New York-based company would continue to invest in China to keep pace with demand from local LCD panel makers.

"We'll add the right amount of processing, even front-end processing, at the right time, when the industry is ready to expand to that level," Clappin said.

"We do expect it to grow, and when it does grow, we'll grow with it."

Clappin declined to say how big the facility in Beijing was, how much investment it involved or when it might move on to the full process of glass production, citing the risk of giving key information away to competitors.

John Bayne, president of Corning's China Display Technologies unit, said that he expected its LCD glass sales in China to grow at or above the worldwide growth rate of 25-30 percent that the company projects for LCD glass demand this year.

"It won't fall behind (worldwide growth) on a percentage basis. If anything, maybe a little bit higher," Bayne told Reuters.

The executives noted that the relative immaturity of the Chinese LCD panel industry made it more complicated to map out expansion plans, including where to locate.

Major players include Beijing-based BOE Technology Group (000725.SZ), SVA Electron Co (600602.SS) in Shanghai and the Longteng group in Kunshan, near Shanghai.

The three said late last year that merger talks among them, designed to create a globally competitive panel-making giant, had been unsuccessful. Few details have emerged since then, and it is yet unclear what direction potential consolidation will take.

"We can add capacity in a fairly reasonable time-frame, so once it's clear where the growth is going to be, we can either supply offshore in the interim or make investments and grow in parallel as the panel makers expand," Bayne said.

Corning also produces optical fibre and cable in China, as well as emissions control equipment.

Clappin added that he had seen little impact on LCD glass sales from the slowing U.S. economy, and that he expected Corning's global sales of the glass to keep up with the overall demand growth of 25-30 percent.

"The world economy is holding up panel sales in the absence of strong participation from the U.S.," he said. "At the moment we're not seeing any big negative impact, in fact hardly any impact at all." (Reporting by Jason Subler; Editing by Alan Wheatley)