Corning Is Poised for Dominance in AI Data Centers. It’s All About the Optics.
The Wall Street Journal
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Story by Nicholas G. Miller • 21h
As the AI boom fuels the meteoric rise of new startups and cutting-edge chip designers, 174-year-old glass company Corning is joining in on the fun.
The company, known for developing Pyrex, Gorilla Glass and the encasement for Thomas Edison’s incandescent lamp, makes glass for cellphones, TVs and cars. But now, its glass technology, developed through decades of investment in research and manufacturing, has made it the dominant supplier of fiber optics for data centers, setting it up as one of the biggest winners from the AI boom, analysts say.
“They were in the right place at the right time and they have basically monopolized the fiber used for AI application,” said Susquehanna analyst Mehdi Hosseini.
As a result, the company has seen surging growth and a booming stock price. Its second-quarter profit more than quadrupled to $469 million, while shares have risen 58% over the past three months, reaching $83.80.
As data centers expand, and AI models train and operate at larger scale, the industry needs fiber optic connections with the highest bandwidth, speed and efficiency possible. Analysts say Corning, which invented the technology of optical fiber in 1970, now has fiber optics that are vastly superior to the competition’s, allowing customers to run their data centers with more capacity and at a lower cost.
Analysts like Steven Fox, chief executive of equity research firm Fox Advisors, say Corning’s research and innovation have allowed it to develop fiber optics with lower latency and that require less power to run. “There’s a lot of black magic to it, but Corning is innovating on that front,” Fox said. “They’re basically offering customers a way to run their databases, run their networks much more efficiently than prior generations of their products and even against competing products in the market today.”
Analysts also say that the company has built state-of-the-art manufacturing facilities, earning it an edge not just in product innovation but also production. The company has used automation to enable customers to customize their fiber optics in different configurations, Hosseini said.
Corning’s status as a U.S. company that produces a significant portion of its glass domestically also provides it a significant advantage, analysts say. The U.S. imports some fiber optics from China, Vietnam and Japan, which are now subject to elevated tariff rates. Many of the world’s data centers are also being built in the U.S., giving fiber optics companies with a significant U.S. presence a leg up.
“Because of the tariffs, and because of where data centers are being built now, being local for local is really important,” Fox said, adding that while Corning does manufacture in Mexico, the imports are compliant with the U.S.-Mexico-Canada Agreement. “They have the world’s largest fiber cabling, fiber connector facilities in North Carolina. That has definitely been an advantage.”
But the surge in Corning’s stock may not be sufficiently factoring in potential risks, said Morningstar analyst William Kerwin. The company won’t be overtaken by competitors in the data center market given its superior technology, but there is some uncertainty about how much revenue from the AI boom will trickle down to Corning, Kerwin said.
The company has a target of growing its data center business 30% every year through 2027, but the stock’s current valuation assumes that target “gets blown out of the water,” Kerwin said. That’s possible given the astronomical potential of the AI market, but it’s still a lofty assumption, he added.
Other analysts say the rest of Corning’s robust business supplying materials for products ranging from phones to cars could offset risk from AI. The company is also expanding into supplying inputs for semiconductors and solar panels. If U.S. production of those technologies picks up, Corning could potentially see an additional $5 billion in revenue, adding further upside to the stock’s current valuation, Hosseini said.
Write to Nicholas G. Miller at nicholas.miller@wsj.com
PS
Copilot:
Yes—Corning is actively developing specialized glass substrates for semiconductors, and the industry sees them as a transformative enabler for next-gen AI and HPC packaging.
Corning’s Role in Glass Substrates
- Corning is aggressively entering the glass substrate market, developing a new material called SG 3.3 Plus tailored for semiconductor packaging.
- This substrate offers improved coefficient of thermal expansion (CTE) and elastic modulus, addressing key challenges like glass breakage and process compatibility.
- Corning is supplying prototypes to glass processing equipment makers and evaluating with global chipmakers including Samsung, Intel, and TSMC.
- It already provides glass wafers and panels for advanced packaging, wafer thinning, and interposer carriers.
Why Glass Substrates Are a Big Deal
- Dimensional stability: Glass is flatter and more stable than organic substrates, enabling finer circuit patterning.
- Thinner form factor: Supports ultra-thin packaging for AI accelerators and HPC chips.
- Thermal and mechanical advantages: Better heat resistance and rigidity improve reliability.
- Integration potential: Future chipsets may use a single piece of glass as the core substrate, increasing demand per unit.
Competitive Landscape
- Corning is challenging Schott (Germany) and Asahi Glass (Japan), who’ve led early prototyping.
- Its entry is shifting the dynamic, with processing companies exploring partnerships and automated production lines ramping up.
If you want to riff on how this intersects with Intel’s EMIB/Foveros roadmap or NVIDIA’s CoWoS evolution, I’m ready. Or we can dig into how substrate flatness affects interconnect pitch scaling.
PSS
Everybody and siblings in Glass Substrate.
MoAPS?
Shirley. |
