Corning Delivers Annual Optical Fiber Briefing at OFC/NFOEC 2005

Business Wire, March 8, 2005

ANAHEIM, Calif. -- Corning Incorporated (NYSE:GLW) will present its 24th annual overview of the optical fiber industry at an investor and media briefing being held today in conjunction with the OFC/NFOEC Conference in Anaheim, CA. The presentation will take place at 8 a.m. PST in the Anaheim Marriott Hotel on 700 W. Convention Way in the Los Angeles/La Jolla rooms.

Eric S. Musser, newly named vice president and general manager of Corning Optical Fiber, will provide attendees with Corning's perspective on the 2004 optical fiber market and will discuss worldwide fiber demand by region and application segment. He will also address the telecommunications environment, including fiber to the X (FTTx), and give an update on Corning fiber, cable, hardware and equipment product developments.

2004 Fiber Market

Musser will communicate that the total 2004 worldwide fiber market remained stable for the second year in a row at about 55 million fiber kilometers. Musser will say that these estimated numbers match Corning's expectations provided at last year's event.

Musser will then detail the 2004 demand by region and application, citing the following estimates: North America, which accounted for 30 percent of the total worldwide demand, grew by about 30 percent over 2003, as a result of increased demand from regional Bell operating companies municipalities in support of their FTTx buildouts. China, representing 25 percent of worldwide demand, was stable year-over-year as it continues to focus on network builds in the intra-provincial, metro, and access segments. Western Europe, representing 15 percent of the worldwide demand, increased by approximately 10 percent with broadband demand sparking new cable deployments.

Japan, representing 15 percent of the worldwide demand, decreased by about 40 percent, driven by a sharp drop in fiber deployment by both NTT and the power utilities in the region. "Other Asia," which represented 10 percent of the worldwide demand, grew by about 10 percent primarily due to positive market dynamics in India and Australasia. The "Rest of World" segment, which comprised 5 percent of the worldwide demand, was up about 40 percent, with growth seen in Russia, the Middle East, South Africa and Latin America.

Musser will continue by breaking out the estimated 2004 growth rates by application: long-haul terrestrial/submarine, metro, access and premises. Long-haul terrestrial/submarine, accounting for 10 percent of the total worldwide demand, showed an increase of about 15 percent off of a small base, driven by growth in emerging markets such as Latin America, Russia, Eastern Europe and Africa where country-level backbone projects are continuing. Demand for fiber in metro applications, representing 40 percent of the total worldwide demand was up approximately 15 percent as a result of activity in North America, Western Europe and most of Asia. Access demand, which makes up about 45 percent of total worldwide demand, was down 15 percent overall due to the drop off in Japan that was not fully offset by access growth in other regions of the world. Excluding Japan, the access segment actually grew by about 20 percent. Premises, accounting for 5 percent of the total worldwide demand, grew by about 15 percent with data centers showing the strongest growth.

Musser will also note that with regard to 2005, Corning expects to see some modest growth in the market. Although Japan is expected to decline slightly relative to 2004, this decrease will more than likely be offset by strength in North America and modest growth in other regions of the world. Worldwide fiber demand growth will continue to come from the metro and access segments - with growth in North American broadband initiatives leading the way.

Telecommunications Environment

Musser will then briefly review the 2004 results for Corning's Telecommunications segment. At last year's event, Corning expressed its confidence in a bright future for its telecommunications segment, and Musser will say that Corning's 2004 results bore that out.

"We saw continued growth in hardware and equipment globally in 2004, driven by access construction and this business now represents about half our Telecommunications segment's revenue," Musser will say. "Corning experienced fiber price declines of less than 10 percent in 2004, and performed well with an 18 percent increase in fiber demand in a market of relatively flat volume. This was driven primarily by growth in North America resulting from the commencement of Verizon's fiber-to-the-premises build-out."

While addressing the Corning plan for 2005, Musser will say, "Any industry recovery will be led by construction in the access segment of the network, which is why we are focused on the FTTx opportunity around the globe." Corning will be working to grow its hardware and equipment business globally and expects modest growth in the fiber and cable volume, primarily driven by FTTx, with fiber pricing continuing to moderate.

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