Speaking at an Investor Day event in New York, Corning CEO Wendell Weeks said the company expects 6%-8% compound annual sales growth for the 2020 to 2023 period primarily driven by organic growth in Corning’s market-access platforms.
According to Corning estimates, about 100x more metro fiber is needed to connect a 5G network with dense small cells than was required to support 3G/4G networks. This is twice as fiber as required for FTTH in the same area.
In hyperscale data centers, a non-blocking optical is required to link compute, storage and networking resources. Corning estimates that the new data center network architecture requires 10 times more optical links. In fact, a single hyperscale data center can require more than one million fiber kilometers in a single campus — the equivalent to FTTH in the entire Dallas suburbs.
The move to onboard optics in servers and switches will also impact fiber demand. The copackaging of optical transceivers with switch ASICs may lead to new types of fiber. Corning believes it is well-positioned for this transition.
For Corning, Densification = Glassification.
Corning outlined the following priorities and key drivers for the 2020 to 2023 period:
- Optical Communications to grow approximately twice as fast as the passive optical market, driven by 5G and next-gen hyperscale data centers;
- Automotive market sales to double by 2023, driven by growth in gasoline particulate filters and the company’s new automotive glass solutions business;
- Mobile Consumer Electronics market sales to continue on a path to doubling, as Corning captures more value per device and wins in new device categories with Corning Gorilla Glass and other innovations;
- Life Sciences Vessels market sales to grow at least double the industry rate, driven by cell and gene therapy-related demand; launch of Valor Glass for pharmaceutical packaging has potential to become a multi-billion-dollar franchise;
- Display to be stable as price declines remain moderate, television screen size continues to increase, and Gen 10.5 plants come on line.
Corning also expects to invest $10 billion to $12 billion in RD&E, capital and mergers and acquisitions. Its primary focus on organic growth will continue.
“We believe that Corning is more resilient than at any point in its history,” said Tony Tripeny, executive vice president and chief financial officer. “Our strategic investments are paying off and our relationships with industry-leading customers are creating new opportunities for collaboration and growth. Based on these factors and our record of execution, we are confident in our ability to meet the long-term goals we are setting today.”
A webcast of the presentation is online (2 hours 43 minutes):
https://edge.media-server.com/m6/p/oeaqhoh6
https://investor.corning.com/investor-relations/default.aspx