Corning and Samsung Form Equity Venture Company to Mass Produce Optical-Networking Products
New company will automate production of DWDM components
Corning, New York. Corning Incorporated (NYSE: GLW) and Samsung Electronics announced today that they have formed a new equity-venture company to mass- produce micro-optic products used to expand the capacity of the Internet. The new company, Samsung Corning Micro-Optics, will manufacture dense wavelength division multiplexing (DWDM) packaged components using revolutionary robotics and other automation developed by Samsung in key manufacturing steps currently done manually. As a result, the company expects enormous benefits in capacity, reproducibility, unit cost and reduced cycle time. Terms of the agreement were not disclosed. Samsung Corning Micro-Optics will be located in an existing Samsung facility near Seoul in Suwon, South Korea. With its component packaging capability the company will substantially expand Corning’s DWDM business and will serve as a new source of high-quality, low-cost components to its erbium-doped fiber amplifier (EDFA) module business. Volume manufacturing is expected by mid-2000.
“Through this equity venture, Corning and Samsung are employing their collective strengths to capitalize on the rapidly growing global telecommunications market,” said Ki Ryong Song, chief executive officer of Samsung Corning Micro-Optics. “Together, Samsung’s expertise in dynamic automated manufacturing systems and Corning’s leadership in state-of-the-art photonic products will allow the market to benefit from a high-quality, low-cost supply of optical components and modules.”
Samsung Corning Micro-Optics is expected to be a powerful entrant into the high growth DWDM market. The packaging capacity added by this new venture will be facilitated by thin film filters supplied from Corning’s operation in Marlborough, Massachusetts. Corning recently said it will increase thin film manufacturing ten fold in Marlborough by year-end 2000.
[Corning also expects to supply its new venture with thin film filters produced by OFC, a subsidiary of NetOptix Corporation of Sturbridge, Massachusetts. Corning today announced that it had reached an agreement to acquire NetOptix for approximately $2 billion. The transaction is expected to close in the second quarter 2000.]
Samsung Corning Micro-Optics will also become a supplier of passive optical components for Corning’s EDFA module business. The automated manufacturing equipment designed for, and installed in, the Suwon facility represents a new standard in high-volume, automated technology for these products in the industry.
“Samsung Corning Micro-Optics is an important piece of Corning’s telecommunications strategy,” said Gerald J. Fine, vice president and general manager of Corning’s Photonic Technologies Division. “The ability to marry our micro-optic filter technology with Samsung’s world-class, high-volume packaging technology will allow Corning to build our global leadership position in photonic products.”
Market analysts have estimated that the worldwide market for DWDM components is expected to grow from $300 million in 1999 to $600 million this year, and to $1 billion in 2001.
The establishment of Samsung Corning Micro-Optics is the third major joint venture between the Samsung Group and Corning Incorporated, which originated with the Samsung-Corning Company Ltd., established in South Korea in 1973.
Established in 1851, Corning Incorporated creates leading-edge technologies for the fastest-growing markets of the world’s economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning’s revenues in 1999 were $4.3 billion.
Corning Contacts:
Paul A. Rogoski 607.974.8832
rogoskipa@corning.com
John E. Knight 607.974.5426
knightje@corning.com
Investor Relations Contact:
Katherine M. Dietz 607.974.8217
dietzkm@corning.com
Katherine M. Dietz 607.974.8217
dietzkm@corning.com
E-mail: dietzkm@corning.com
