Display Technologies The LCD Revolution: From Taiwan to...

DisplayTechnologies

The LCD Revolution:From Taiwan to the World

Alan EusdenPresident, Corning Display TechnologiesTaiwanJune 11, 2008

2Display Technologies © Corning Incorporated 2008

Forward Looking And Cautionary Statements

Certain statements in this presentation constitute “forward looking

statements”within the meaning of the U.S. Private Securities

Litigation Reform Act of 1995. Such forward looking statements arebased on current expectations and involve certain risks and

uncertainties. Actual results might differ from those projected in the

forward looking statements. Additional information concerningfactors that could cause actual results to materially differ from those

in the forward looking statements is contained in the Securities and

Exchange Commission filings of the Company.

3Display Technologies © Corning Incorporated 2008

4Display Technologies © Corning Incorporated 2008

5Display Technologies © Corning Incorporated 2008

Corning’s expansions across Asia correlate withrise in global demand

'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

LCD Glass Demand

LCD

Gla

ss

Corning entersTaiwan

Corning entersJapan

Corning entersKorea

Corning entersChina

6Display Technologies © Corning Incorporated 2008

2001 –Corning expands into Taiwan

• Corning becomes first LCDglass substrate supplier tolocate a manufacturingoperation in Taiwan

• Facility is located in Tainan

7Display Technologies © Corning Incorporated 2008

2004 –Tainan begins melting operations

• Corning expands capability ofTainan facility

• Plant begins melting operationsto keep pace with rapid growthof customers

• In 2005, the plant wasexpanded yet again

8Display Technologies © Corning Incorporated 2008

2006 –Corning builds facility in Taichung, Taiwan

• Corning opens second LCDmanufacturing facility in Taiwan,located in Taichung

• A milestone in Corning historydue to the scale of the facilityand speed of completion

• Contains over 100,000 metrictons of steel

• Over 20,000,000 hours of laborto construct

9Display Technologies © Corning Incorporated 2008

Committed to Taiwan

• Providing a reliable supply of high-quality glasssubstrates for panel makers

• Largest foreign manufacturing investor in Taiwan– Corning has invested billions in Taiwan– 2,000 employees –local hires

• CDTT employees are dedicated to CSR

• Recent honors:– Excellent Foreign Workers and Employers Recognition,

Bureau of Labor Affairs, Taichung City Government– Gold Panel Awards - Outstanding Industry Contribution Award, IDB

10Display Technologies © Corning Incorporated 2008

Corning entersJapan

Corning entersKorea

Corning glass innovations meet industry needs

'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

LCD Glass Demand

Corning7059

Corning1737

Corning1737G

EAGLE2000®

Corning entersTaiwan

LCD

Gla

ss

Corning entersChina

11Display Technologies © Corning Incorporated 2008

12Display Technologies © Corning Incorporated 2008

2006 –Corning launches industry’s firstenvironmentally friendly glass

• EAGLE XG™ is the mostenvironmentally friendly LCDglass on market, with no addedheavy metals or halides

Same Advanced Benefitsas EAGLE2000®

EnvironmentallyFriendly Composition

+

13Display Technologies © Corning Incorporated 2008

EAGLE XG™ helps customers manage their totalproduct life cycle

Product Concept and Design

Future-proof:No use of heavy metals or

any other regulated materials

End-of-Life

Completely non-hazardouscomposition ensures ease of

recycling

Manufacturing and Operations

High quality performance, noglass-related effluent or

disposal concerns

Consumer OwnershipExperience

Decreased environmentalimpact

ProductLife Cycle

14Display Technologies © Corning Incorporated 2008

2007 –EAGLE XG™ wins two major industry awards

• Corning receives major industryawards for EAGLE XGsubstrates:– Grand Prize in 2007

Advanced Display of theYear Award presented atFINETECH Japan

– 2007 Display Component ofthe Year Award from SID

• Awards demonstrate industry’srecognition of Corning’soutstanding technicalachievement

15Display Technologies © Corning Incorporated 2008

16Display Technologies © Corning Incorporated 2008

Market need: larger Gen sizes to supportlarge-size LCD TV

Year

InDevelopment

20062005

2004

2003

2002

20001995

1993

LCD TV

Gen 8

Gen 7

Gen 6

Gen 7.5

Gen 10

Gen 5

Gen 4Gen 3

Gen 2 InformationTechnology

17Display Technologies © Corning Incorporated 2008

Gen 8 is the largest size currently available

Gen 8 panelization

90%2426”

95%846”

97%1832”

94%3223”

90%652”

EfficiencyPanel #

Illustration showing Gen 8 substrate with six 52-inch panels

18Display Technologies © Corning Incorporated 2008

Gen 10 will support a wide range of panel sizesGen 10 panelization

84%1837”

86%857”

89%1542”

84%2432”

84%665”

EfficiencyPanel #

Illustration showing Gen 10 substrate with eight 57-inch panels

19Display Technologies © Corning Incorporated 2008

20Display Technologies © Corning Incorporated 2008

Global Glass Demand

Source: Corning

CAGR(’07-’09)

Mill

ion

sq.ft

.

Outlook for global glass demand

•25-30% in 2008–>450 M sq.ft.

•25% CAGR (’07-’09)

25%

0

700

1400

2100

2800

2007 2008 2009

21Display Technologies © Corning Incorporated 2008

0.7à 1B units

83à 110M units

•Mobile phones

•GPS & autodisplays

100à 150Glass demand(million sq.ft.)

16%Unit growth ofsmall applicationswith LCD displays

Current View(’07à ’09)

Small Size

Small

Global Glass Demand CAGR(’07-’09)

Continued growth in small displays (<10”)

22%

25%

Source: Corning

Mill

ion

sq.ft

.

0

700

1400

2100

2800

2007 2008 2009

22Display Technologies © Corning Incorporated 2008

Nearly half of total PC sales will be notebooks

107à 156Units (M)

14.8”à 14.9”Avg. screen size

43%à 51%Notebook % ofPCs

230à 320Glass demand(million sq.ft.)

11%Underlying annualPC unit growth

Current View(’07à ’09)

Notebook

Small

Global Glass Demand CAGR(’07-’09)

Notebook22%

19%

25%

Source: Corning

Mill

ion

sq.ft

.

0

700

1400

2100

2800

2007 2008 2009

23Display Technologies © Corning Incorporated 2008

Taiwan accounts for about 1/3 of global notebookpanel sales

Taiwan

Japan

Korea

China

Worldwide market share - NB panels

Source: Displaysearch, unit share

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108

Mar

ket S

hare

24Display Technologies © Corning Incorporated 2008

LCD monitor growth slowing

161à 187Units (M)

18.4”à 19.4”Avg. screen size

4%Underlying annualmonitor growth

550à 650Glass demand(million sq.ft.)

88%à 95%LCD penetration

Current View(’07à ’09)

DesktopMonitor

Small

Global Glass Demand CAGR(’07-’09)

Notebook

Monitor

22%

19%

8%

25%

Source: Corning

Mill

ion

sq.ft

.

0

700

1400

2100

2800

2007 2008 2009

25Display Technologies © Corning Incorporated 2008

Taiwan is the leading producer of desktop monitors

Source: Displaysearch, unit share

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108

Mar

ket S

hare

Taiwan

China

Korea

Worldwide market share - monitor panels

Japan

26Display Technologies © Corning Incorporated 2008

79à 132Units (M)

38%à 60%LCD penetration

4%Underlying annualTV unit growth(all technologies)

840à 1,450Glass demand(million sq.ft.)

31.4”à 34.2”Avg. screen size

Current View(’07à ’09)

LCD TV

LCD TV penetration is key driver for glass growth

Global Glass Demand CAGR(’07-’09)

22%

19%

8%

33%

25%

SmallNotebook

Monitor

TV

Source: Corning

Mill

ion

sq.ft

.

0

700

1400

2100

2800

2007 2008 2009

27Display Technologies © Corning Incorporated 2008

Taiwan is also the leading producer of LCD TV panels

Source: Displaysearch, unit share

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108

Mar

ket S

hare

Taiwan

Korea

Worldwide market share - LCD TV panels

China

Japan

28Display Technologies © Corning Incorporated 2008

CAGR('07-'09)

LCD glass market growth strongest in large Gensizes

Gen 8+

Gen 6 & 7

Gen 5

158%

23%

3%

25% •Gen 8+ growing fastest– '09 demand is 5x '07

•Supports growth in largesize TVs

Source: Corning

Mill

ion

sq.ft

.

0

700

1400

2100

2800

2007 2008 2009

Global Glass Demand

29Display Technologies © Corning Incorporated 2008

Taiwan represents over 1/3 of global LCDglass demand

0

500

1000

1500

2000

2500

3000

2007 2008 2009

Global Glass Demand

Source: Corning

Taiwan 39%

Japan 14%

Korea 45%

China 2%

% of GlassDemand in 2008

30Display Technologies © Corning Incorporated 2008

Potential impact of an economic slowdown

•We are not forecasting a slowdown in the economy–Our presentation today assumes “business as usual”

•We have not seen any signs of a slowdown in our business

•However, we are not ignoring the possibility of a recession

•Our strong balance sheet and our focus on low cost will helpus weather a potential storm

31Display Technologies © Corning Incorporated 2008

Recent U.S. recessions have had little or no impact toWW TV sales; older data is conflicting

EnergyCrisis I(’73-’75)

EnergyCrisis II(’81-’82)

Junk Bond/StockCrisis (’90-’91)

Gulf War

DotcomBubble

Burst (’01)

PostVietnam

War(’69-’70) 1973: 23%

1974: -5%1975: -20%1969: 17%

1970: 24%

1990: 2%1991: 1%

1981: 15%1982: -2%

2001: 3%

Today vs. 1970• Only 30M TVs vs. 200M today• Few in developing countries• 1970s TVs = >10% of discretionary income; today <5%

U.S. Recessions vs. Worldwide Color TV Sales (all technologies) TV sales CAGR: 4%

0

50

100

150

200

250

1965 1970 1975 1980 1985 1990 1995 2000 2005

M U

nits

Source: CI Internal / Industry ExchangeNote: Official recession periods by National Bureau of Economy Research, with an exception of Asia Economy Crisis

32Display Technologies © Corning Incorporated 2008

Potential impact of an economic slowdown• We are forecasting LCD TV sales in the U.S. to grow from 23 million

in 2007 to 29 million in 2008•An increase of 6 million units

• The average LCD TV has 11 square feet of glass

• For example, if LCD TV sales are flat in the U.S., it would equal 66million square feet in “lost glass demand”

•Total glass market estimate for 2008: 2.2 billion square feet

33Display Technologies © Corning Incorporated 2008

Looking ahead

• Corning has played a pivotalrole in the industry’s progressby delivering numerousinnovations

• Corning will continue to providea reliable supply of high-technology glass whileworking to create next-generation platforms

• We are helping the industrybecome more environmentallyfriendly via EAGLE XG™

34Display Technologies © Corning Incorporated 2008