Corning's Gorilla Glass: How big can it be?

Corning's Gorilla Glass is on track to be a $1 billion business next year, a nice sum for a technology that was created in the early 1960s. The lesson: Keep inventing and don't give up just because a technology is ahead of its time by a smidge (actually a few decades).

Corning's Gorilla Glass is on track to be a $1 billion business next year, a nice sum for a technology that was created in the early 1960s.

The lesson: Keep inventing and don't give up just because a technology is ahead of its time by a smidge (actually a few decades). Corning talked up its ultra-strong glass in 1962---then known as Chemcor---and sent video to 200 television stations. The problem: There wasn't much of a use for super strong glass. In fact, Chemcor was used from 1960s to the 1990s in select applications, but didn't take off until 2005 or so when the glass was used as a cover for a mobile device. It's quite a timeline as noted by the Associated Press.

By 2008, Corning produced the glass, then called Gorilla Glass, in uniform thin sheets. Now Gorilla Glass has more than 200 design wins with half of them already shipping, that's up significantly from just 8 weeks ago. The next stop is an ultra-thin bezel-less LCD TV application. The growth for Gorilla Glass is off the charts. Corning said Gorilla Glass will deliver about $1 billion in revenue in 2011, up from about $250 million in 2010.

Corning CFO Jim Flaws last week said on the company's earnings conference call:

Gorilla sales are currently on pace to be about $250 million in sales this year. We recently reached an agreement to supply cover glass on LCD televisions that should result in several hundred million dollars of additional sales in 2011. As a result, we believe Gorilla Glass has the potential to reach $1 billion in sales next year.

Jefferies analyst George Notter said in a research note that the "question in our minds is not whether demand is there, but whether Corning can ramp production fast enough to meet that demand." He added:

Corning's Gorilla Glass product line is quickly gaining traction, and is poised to become a significant contributor in the next year. The company has planned significant capacity expansions over the next few years to meet coming demand.

Gorilla Glass can be found in the Motorola Droid, Cliq and Backflip, LG X300 PC as well as multiple slate PCs from Motion Computing. Simply put, Gorilla Glass is going to be a nice contributor to Corning's bottom line even though profit margins are a bit sketchy at the moment.

Flaws said:

Our model for our Gorilla business opportunity is the glass portion of the product should have margins similar to Display. But the finishing portion, which can range from simple ion exchange to other products, such as anti-glare and screen printing will have very low margins. So short term, you should expect the margin structure for the overall Gorilla to be less than the corporate average. On the finishing processes, these are very new to us, and we are working to improve the cost structure of those as we go forward. But we're very confident about the glass portion, and on some of the hand-held items, where we've been finishing for awhile.

This post was originally published on Smartplanet.com