Corning commits $460M to Chinese LCD glass manufacturing plant

Corning (GLW +0.1%) is creating a Gen 10.5 LCD substrate glass manufacturing facility in Hefei, China next to an LCD manufacturing plant owned by client BOE Technology. (PR)

After factoring government/commercial incentives, Corning expects a net outlay of $460M - $290M in cash and $170M in currently-owned precious metals. Using Corning's glass, BOE plans to begin mass-producing LCDs for large-size TVs by Q3 2018.

As part of the deal, Corning has struck a long-term supply agreement with BOE for Gen 10.5 substrate glass produced by its Hefei facility. BOE has also extended a supply agreement for substrate glass manufactured at Gen 8.5 sizes and below.

Corning notes the market for large-size TVs is expected to see a 20%+ CAGR (no timeframe is given). The company is coming off a Q3 in which its Display Technologies (LCD glass) segment saw revenue drop 25% Y/Y (11% excluding the impact of a weak yen) to $757M due to soft TV and PC demand.