By Brendan Coffey, Editor of Cabot Green Investor
From Cabot Wealth Advisory 8/19/10 Sign up for free Cabot Wealth Advisory e-newsletter
Market watchers speculate that a key component of the wildly successful iPad actually got its start in the 1960s as a way to solve the problem of Ma Bell’s phone booth glass being shattered by vandals. That market fizzled, regular glass being much cheaper, but the product was revived when executives saw a market in the smart phone revolution.
The product is called Gorilla Glass, and
Corning (GLW), the venerable upstate New York firm that has been thriving on fiber optics and liquid crystal display glass, makes it. The story with Gorilla Glass, true or not, is that in the early 1960s, one Corning executive quipped to another “The problem with glass is that it breaks.” The other replied in seriousness, “Why don’t you do something about that?”
The result was Chemcor, a glass that was hardened in a proprietary, environmentally friendly method developed by Corning that made it very hard to break, scratch or puncture. Back then, the company was so proud of it they sent films of scientists trying to break Chemcor glass to television stations around the country. But no one bought it.
Revived and tweaked and re-introduced to the market late last year under the more marketing-friendly name Gorilla Glass, it can be produced to be thinner than a dime, while being resistant to cracking when dropped and not losing effectiveness after long periods of touch screen usage.
Corning so far has 19 customers for Gorilla Glass, most of which it cannot name because of non-disclosure agreements and presumably Apple is in that group. We do know the popular Droid smart phone uses Gorilla Glass, as well as Dell, Samsung (which also supplies some iPad components) and LG, among other companies.
Regardless of whether Apple uses Gorilla Glass or some alternative, so far this year, Gorilla Glass sales amounted to $250 million in the first two quarters for Corning. Many analysts, myself included, believe Gorilla Glass can be a $1 billion business in 2011 thanks to both smart phones and touch screen markets, as well as a planned rollout of ultrathin, stylish flat panel televisions with what I think will be a compelling feature—because Gorilla Glass is so tough, TVs will be made without frames.
Corning’s other businesses have been doing well too: LCD glass sales have held up better than anyone expected (and the Cabot Green Investor portfolio made a 15% profit on Corning last year having correctly seen that LCD TV sales were holding up); environmental products, primarily ceramic substrates, have grown strong double digits this year. To boot, for those with a strong inclination to Green stocks, Corning owns a chunk of Hemlock Semiconductor, one of the world’s largest suppliers of polysilicon, a primary solar panel material. Corning, at 17 a share, sports a price-to-earnings ratio of just 9, a bargain. My subscribers added it Friday.
To learn more about Corning and other top Green stocks, click here:
Cabot Green Investor.
Brendan CoffeyAnalyst and Editor of Cabot Green Investor Brendan Coffey is a member of the Cabot investment team and editor of
Cabot Green Investor. A veteran financial journalist, Brendan has spent more than a decade writing about investing for publications including Barron's, Forbes, The Wall Street Journal and a number of private-client brokerage newsletters.