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Optical fiber surges again for Corning

Post Time:Nov 28,2011Classify:Company NewsView:332


Corning Inc.'s flashiest and fastest-growing product, Gorilla Glass for smartphone covers, is hogging the headlines. However, it may soon have to share both the media and financial spotlights with an older Corning Inc. product that is surging again — optical fiber.


Optical fiber for communications — developed by Corning in 1970 — was arguably the company's major scientific and technical achievement of the 20th century.


It not only changed the face of the company but also revolutionized the global communications system.


By 2001, when the telecom market collapsed, fiber sales accounted for most of the company's revenue.


For years after that, fiber's contribution to Corning's revenue and profits was negligible.


Today, that's no longer the case.


Sales of optical fiber are on pace to hit $2 billion this year, a 20 percent increase over 2010 and about 20 percent of Corning's total revenue.


In the first three quarters of 2011, fiber profits totaled $169 million, dwarfing the $97 million total for 2010.


For the first time in a decade, fiber supplies are tight and Corning Inc. is expanding its manufacturing capacity. Some of the company's $6 billion in cash will go toward that expansion.


Optical fiber is hot again for two reasons — business networks are being built and expanded and fiber-to-the-home projects are boosting demand.


The Twin Tiers' largest employer expects increasing demand for data and the growth of wireless use to fuel higher fiber sales in the next few years.


Although it seems counter-intuitive, more wireless communications means more demand for fiber because wireless signals travel much of their distance over wired (fiber or copper) networks.


Optical fiber may never produce the level of revenues ($5.1 billion) and profits ($681 million) that it achieved at Corning Inc. in 2000.


It is clearly, however, on its way back to becoming a significant contributor to Corning's success and a factor in the company's drive to reach $10 billion in revenue by 2014.


Source: http://www.democratandchronicle.comAuthor: shangyi

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