Of all the high-tech markets in which Corning Incorporated (NYSE:GLW) participates, none have a greater influence on its financial results than the LCD industry. To be sure, last quarter Corning's Display Technologies segment generated nearly 42% of the company's revenue at $1.1 billion, dictated primarily by growth in the LCD glass market.
Most notably, Corning owns a proprietary fusion process for producing large, high-quality LCD glass substrates. By taking advantage of this large-scale process, Corning says, TV manufacturers are able to efficiently produce a wide range of panel sizes and reduce the price of LCD TVs even further. What's more, any given TV can contain up to three layers of glass from Corning, including its Eagle XG product for backplanes and frontplanes/color filters, and its ultra-durable Gorilla Glass (which technically falls under Corning's Specialty Materials segment) to serve as a protective front cover.
But if one new product unveiled earlier this month at CES 2015 is any indication, Corning is working hard to add yet another one of its products into the LCD screen mix.
Enter Iris Glass
Meet Iris Glass, a new substrate Corning says not only makes LCD TVs brighter, but also enables them to be designed as thin as smartphones.
In short, Corning developed Iris Glass for use in LCD TVs as a light-guide plate, which serves to distribute and direct LED light through the TV as an integral part of its backlight assembly. Up until now, the display industry has used plastic for this purpose.
However, plastic isn't rigid enough to stand on its own, which means panel makers must incorporate extra structural components to support the display. What's more, plastic expands and contracts depending on humidity levels, so edge-lit LCD TVs also require a wider bezel to account for size fluctuations. By contrast, Corning's Iris Glass is not only 36 times stiffer than plastic, but also offers 90% lower thermal expansion.
The end result, Corning says, is that panel makers no longer need wider bezels or additional structural components, so they can now design large-screen TVs that are less than 10 millimeters thick.
But that begs the question: Why couldn't panel makers use a different glass for this purpose?
Most important among Iris Glass' superior qualities is its ability to transmit light, as previous glass products failed to effectively serve that role.
"Initially, the display industry wanted to use glass LGPs when edge-lit LEDs first entered the market," noted Corning VP John Bayne. "However, the transmission was unacceptable, so panel makers defaulted to plastic."
In short, Corning recognized from the beginning that a need for a better light-guide plate exists, so it created Iris Glass to fill that need.
Risks of disruption
However, while Iris Glass may well give Corning's Display Technologies segment a welcome boost, it may not last forever.
To be sure, keep in mind that leading television producer LG Electronics (NASDAQOTH:LGEAF) is pushing hard to promote the fruits of organic light emitting diode, or OLED, research from its display-making affiliate LG Display (NYSE:LPL). And because OLED pixels emit their own light when excited by an electrical current, OLED televisions require no backlight -- and, consequently, no light-guide plate -- and can already be made curved, flexible, and as thin as 4 millimeters.
However, given LG's relatively small manufacturing scale for the technology, OLED televisions remain prohibitively expensive for the time being. But LG is working diligently to expand production and increase manufacturing efficiency, with a near-term goal of bringing OLED TV prices down to a 10% premium to comparable LCDs.
But even then, lower cost LCD TVs should still persist for a number of years. And making them even thinner using Corning's Iris Glass should also go a long way toward both improving their value proposition and extending LCDs' time frame before market obsolescence.
That's not to mention the possibility of a number of Corning products also finding their way into OLED televisions. Whether that turns out to be in the actual product or in the manufacturing process remains unclear, but note Corning demonstrated the latter with its flexible Willow Glass product early last year.
In any case, if one thing is clear it's that Corning has no trouble innovating its way into various highly technical markets as cutting edge technology continues to evolve. However temporary Iris Glass' positive effects might be, Corning investors should be pleased their company is making the most of LCD technology as it stands.