Here's a cliché come to life: an idea whose time has finally come. The idea is Corning's (GLW) Gorilla glass: a thin, flexible and very strong product that was invented in 1962 and then, surprisingly, shelved for four decades.
According to Corning's Kelli Hopp-Michlosky, the glass -- first known as Chemcor -- was shopped around to a variety of likely users without success. "We tried the automobile windshield market, but the glass was too strong for windshields," she says. "And we couldn't find any other application at the time, not even the military. I think there were a lot of ideas, but nothing took hold, no market really developed for it."
A New Opportunity Arises
Up until about a decade ago, Corning's bread-and-butter product was the optical fiber used in telecommunications -- but that industry shrank dramatically after the tech bubble burst in 2001-2002. Soon afterward, with the growing popularity of home computers and cell phones, Corning's liquid crystal display (LCD) business began to soar. It was when those electronic devices became lighter and more portable that a new opportunity presented itself to Corning: to use Chemcor in smartphones and other hand-held devices.
"We had a customer at the time who was looking for a solution other than plastic, because plastic is not scratch-resistant at all," Hopp-Michlosky says. "And they were thinking glass might be a nice, elegant solution. And we went to our vault and pulled Chemcor off the shelf."
Chemcor's evolution into Gorilla glass involved some slight tweaks. Corning says the production process remains environmentally friendly and the glass itself is recyclable. But the product's clarity, light weight and toughness have positioned it to become an important component in modern television design -- as manufacturers make TVs even slimmer and remove the borders that previously held flat-screen sets together. Hopp-Michlosky says the optical properties of Gorilla glass also work well with high-definition and 3-D TVs.
Scaling Up Production
Corning has ramped up production of Gorilla glass at its plant in Harrodsburg, Kentucky, and the company just approved about $180 million in capital expenditures to expand the plant.
"Growing demand for Gorilla glass is quickly consuming our available capacity," said Corning President James P. Clappin in a recent press release. "We are on track to reach sales in excess of $250 million this year, and sales could approach the $1 billion mark in 2011."
The company is also retooling an LCD plant in Shizuoka, Japan, to add Gorilla glass production in Asia, giving rise to concern that most of the jobs associated with Gorilla glass could end up in Asia.
"We're also investing in our Japanese plant, and quite honestly, it's because the device makers are there," says Hopp-Michlosky, who notes that developing the product and getting to the manufacturers "as quickly and as cost-effectively as possible" helps keep the bottom line lower for U.S. consumers.
More U.S. Jobs?
But she says Gorilla glass has the potential to create more domestic jobs. While it's a strong and lightweight product, it's still -- after all -- glass. Compared with electronics, which seem to get more and more compact, shipping the large pieces of glass needed for mass production of television screens, even with minimal breakage, is cost-prohibitive. That could create cost incentives for domestic production of TV sets that use Gorilla glass.
"If Gorilla glass moves into televisions, which we strongly believe that it will, that glass is very difficult to ship overseas," Hopp-Michlosky says. "You have to make it close to the customer -- you just can't ship a hair-thin piece of glass that big and have it get there in one piece."
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