NEW YORK (Reuters) - Corning Inc (GLW.N) has more demand than it can handle for fiber optic cable used in high-speed networks, including roughly 20 percent more orders than expected from Verizon Communications Inc (VZ.N), according to Corning’s chief financial officer.
“We’re actually sold out in fiber right now,” CFO Jim Flaws told the Reuters Technology, Media and Telecommunications Summit on Tuesday.
Corning, which supplies glass for everything from televisions to network cable, will add new manufacturing capacity over the next year in order to cope with booming demand, according to Flaws.
He cited an increase in fiber optic business in Australia and Canada, and in Japan, where networks are being rebuilt after the earthquake, as well as unexpected U.S. growth from Verizon.
While Verizon has slowed down the national expansion of its FiOS television and video services, it appears to be expanding more quickly than expected in markets it has already launched, according to Flaws.
“It’s about 20 percent more than we’d have forecast,” said Flaws referring to Verizon’s orders for both the first quarter and the full year.
Once Verizon has launched its FiOS service in a neighborhood, the amount of fiber optic cable it orders in that market depends on how successful it is signing up customers to connect to the service, Flaws said.
“Their connection rate is higher than what they originally forecast,” Flaws said. As a result Corning is having to increase capacity in a second fiber optic factory.
After the 2000 telecommunications bubble created an oversupply of fiber optic cable, Corning had to stop production in four out of its five factories. It kept a second factory on standby in case demand should improve.
Reporting by Sinead Carew and Liana Baker; Editing by Gerald E. McCormick