WEBVTT 00:00:00.000 --> 00:00:02.240 Welcome back to The Deep Dive, where we plunge 00:00:02.240 --> 00:00:04.500 into the background stories of the global economy, 00:00:04.780 --> 00:00:07.419 the companies and technologies that run your 00:00:07.419 --> 00:00:10.779 world, but often stay just out of sight. And 00:00:10.779 --> 00:00:13.400 today we are definitely pulling one of those 00:00:13.400 --> 00:00:15.099 companies into the spotlight. We really are. 00:00:15.160 --> 00:00:17.660 We're talking about a truly invisible giant, 00:00:18.039 --> 00:00:21.399 Corning Incorporated. You know, when most people 00:00:21.399 --> 00:00:24.039 hear that name, Corning, their minds probably 00:00:24.039 --> 00:00:28.789 drift to... Pyrex measuring cups. Oh, absolutely. 00:00:28.870 --> 00:00:31.030 Or maybe those opaque white casserole dishes 00:00:31.030 --> 00:00:32.750 that, you know, your parents or grandparents 00:00:32.750 --> 00:00:35.729 had. Exactly. They were everywhere. But that 00:00:35.729 --> 00:00:37.869 familiarity, it's actually a bit of a historical 00:00:37.869 --> 00:00:40.590 red herring. A huge one. We're talking about 00:00:40.590 --> 00:00:45.170 a 174 -year -old multinational technology powerhouse. 00:00:45.350 --> 00:00:47.969 Yeah. That is responsible for fundamental components 00:00:47.969 --> 00:00:51.170 in, well, in everything. From the deepest space 00:00:51.170 --> 00:00:53.609 telescopes to the fiber optic cables speeding 00:00:53.609 --> 00:00:56.750 data to your home? And yes, the screen that you 00:00:56.750 --> 00:00:58.549 might be holding in your hand right this second. 00:00:58.649 --> 00:01:01.630 Absolutely. So our mission today is pretty straightforward. 00:01:01.829 --> 00:01:04.030 We're tracing the stunning evolution of this 00:01:04.030 --> 00:01:06.829 organization, which was founded way back in 1851. 00:01:07.010 --> 00:01:09.870 And we're going to analyze its transformation 00:01:09.870 --> 00:01:13.030 from, you know, a traditional glassmaker to this 00:01:13.030 --> 00:01:15.390 industrial titan that specializes in advanced 00:01:15.390 --> 00:01:18.260 optics, ceramics and specialty glass. And we 00:01:18.260 --> 00:01:21.159 want to show you how a strategy based on disruptive 00:01:21.159 --> 00:01:24.560 innovation and maybe more interestingly, how 00:01:24.560 --> 00:01:27.780 surviving massive expensive failures paved the 00:01:27.780 --> 00:01:30.799 way for today's essential technologies. The lineage 00:01:30.799 --> 00:01:33.140 is just remarkable. It started as the Bay State 00:01:33.140 --> 00:01:37.019 Glass Co. in 1851. Right. Then it became Corning 00:01:37.019 --> 00:01:38.879 Glass Works, which is the name most people might 00:01:38.879 --> 00:01:42.469 recognize, until 1989. And now. Now it trades 00:01:42.469 --> 00:01:46.909 his GLW on the NYSE. It's a proud S &P 500 component. 00:01:46.950 --> 00:01:49.370 And look, it's recognized globally as one of 00:01:49.370 --> 00:01:51.170 the world's biggest and most critical glassmakers. 00:01:51.409 --> 00:01:53.730 But the real hook here, the central aha moment 00:01:53.730 --> 00:01:56.950 for you, the listener, is this. How exactly did 00:01:56.950 --> 00:01:59.230 the company famous for kitchenware become the 00:01:59.230 --> 00:02:02.250 exclusive supplier of Gorilla Glass, the screen 00:02:02.250 --> 00:02:04.450 on your iPhone? That is the ultimate question 00:02:04.450 --> 00:02:06.349 of corporate reinvention, isn't it? It really 00:02:06.349 --> 00:02:08.210 is. And the key to understanding that radical 00:02:08.210 --> 00:02:11.159 pivot lies in a single decisive. strategic move. 00:02:11.379 --> 00:02:15.539 In 1998. Exactly. In 1998, when they divested 00:02:15.539 --> 00:02:18.560 all of their consumer lines, Pyrex, Corningware, 00:02:18.780 --> 00:02:22.560 Corel, to focus purely on industrial and scientific 00:02:22.560 --> 00:02:25.740 applications. They just cut ties with nearly 00:02:25.740 --> 00:02:28.860 a century of highly visible brand identity. It 00:02:28.860 --> 00:02:32.319 seems almost crazy. It was a bold, almost ruthless. 00:02:33.770 --> 00:02:35.810 Strategic amputation. I mean, think about it. 00:02:35.849 --> 00:02:37.990 They looked at the brand equity they had built, 00:02:38.090 --> 00:02:40.590 the kitchenware that defined American home life 00:02:40.590 --> 00:02:43.330 for generations, and just decided it wasn't their 00:02:43.330 --> 00:02:46.129 future. Why, though? They decided those products 00:02:46.129 --> 00:02:48.069 simply weren't leveraging their core strength, 00:02:48.330 --> 00:02:51.270 which was and still is proprietary material science. 00:02:51.550 --> 00:02:54.150 And that one move defined their entire current 00:02:54.150 --> 00:02:56.590 scope. Absolutely. Corning now operates across 00:02:56.590 --> 00:02:59.430 five incredibly demanding high technology sectors. 00:02:59.750 --> 00:03:02.830 Display technologies, telecommunications, environmental 00:03:02.830 --> 00:03:05.409 tech, specialty materials, and life sciences. 00:03:05.669 --> 00:03:08.090 And crucially, this wasn't just a random diversification. 00:03:08.469 --> 00:03:10.810 This focus has been driven by a philosophy they 00:03:10.810 --> 00:03:13.169 cemented after World War II. Right. It was about 00:03:13.169 --> 00:03:15.530 aggressively pursuing... pursuing disruptive 00:03:15.530 --> 00:03:18.930 and on -demand product innovation. Constantly 00:03:18.930 --> 00:03:22.689 fueled by extensive, focused R &D spending, they 00:03:22.689 --> 00:03:25.530 chase technological necessity, not just consumer 00:03:25.530 --> 00:03:28.930 trends. And that commitment to R &D is something 00:03:28.930 --> 00:03:30.889 we'll see repeated throughout their entire history. 00:03:31.069 --> 00:03:32.830 It's a foundational commitment. It's in their 00:03:32.830 --> 00:03:35.229 DNA. So I think we should start where it all 00:03:35.229 --> 00:03:38.439 began. the nomadic origins of this company. Okay, 00:03:38.479 --> 00:03:40.199 let's unpack this journey. It starts with the 00:03:40.199 --> 00:03:43.759 founder, Amory Houghton. And in the 19th century, 00:03:43.979 --> 00:03:48.439 glassmaking was heavily dependent on your location. 00:03:48.699 --> 00:03:51.370 Completely. You needed to be close to raw materials, 00:03:51.509 --> 00:03:54.469 and you needed fuel sources. So the company was 00:03:54.469 --> 00:03:56.610 literally looking for the right place to put 00:03:56.610 --> 00:03:58.889 down roots. It didn't start in Corning, New York. 00:03:59.050 --> 00:04:01.889 Oh, not at all. The company started life in 1851 00:04:01.889 --> 00:04:04.689 in Somerville, Massachusetts. It was called the 00:04:04.689 --> 00:04:07.389 Bay State Glass House, founded by Amory Hewton 00:04:07.389 --> 00:04:10.110 Sr. But Massachusetts didn't hold them for long? 00:04:10.310 --> 00:04:12.509 Nope. They made a big jump next, landing in the 00:04:12.509 --> 00:04:14.550 emerging industrial landscape of New York City. 00:04:14.710 --> 00:04:16.870 To Brooklyn. That's right. The company moved 00:04:16.870 --> 00:04:19.529 to Williamsburg, Brooklyn, where they operated 00:04:19.529 --> 00:04:22.629 as the Brooklyn Flint Glass Works. This was a 00:04:22.629 --> 00:04:24.829 critical step, but they were still searching 00:04:24.829 --> 00:04:27.850 for a long -term, stable environment. So it wasn't 00:04:27.850 --> 00:04:31.069 until 1868 that they finally found their permanent 00:04:31.069 --> 00:04:34.170 home. It was. Under the leadership of Amory Houghton 00:04:34.170 --> 00:04:37.290 Jr., the company relocated to and settled in 00:04:37.290 --> 00:04:39.850 Corning, New York. That's what gave the company 00:04:39.850 --> 00:04:41.550 its final name and its permanent headquarters. 00:04:42.199 --> 00:04:45.019 So why Corning, New York? What made that location 00:04:45.019 --> 00:04:47.839 finally the right fit? It was all about logistics 00:04:47.839 --> 00:04:50.980 and energy. Corny had great access to rail lines, 00:04:51.139 --> 00:04:53.019 which was critical for transporting both raw 00:04:53.019 --> 00:04:55.699 materials in and finished glass products out. 00:04:55.779 --> 00:04:58.579 And the fuel. And natural gas, which was essential 00:04:58.579 --> 00:05:01.180 for firing their furnaces consistently. The move 00:05:01.180 --> 00:05:03.899 really solidified their identity, tying the company 00:05:03.899 --> 00:05:06.019 physically and culturally to that town forever. 00:05:06.240 --> 00:05:08.300 It's fascinating how quickly they recognized 00:05:08.300 --> 00:05:11.000 that geographical stability needed to be paired 00:05:11.000 --> 00:05:14.759 with intellectual stability. They set up a formal 00:05:14.759 --> 00:05:18.029 research backbone incredibly early. Decades ahead 00:05:18.029 --> 00:05:20.110 of the curve. We tend to associate these big 00:05:20.110 --> 00:05:23.350 industrial research labs with, you know, Bell 00:05:23.350 --> 00:05:27.370 Labs or Xerox PRC in the mid -20th century. But 00:05:27.370 --> 00:05:29.769 Corning was way ahead of that. They established 00:05:29.769 --> 00:05:31.829 one of the first industrial research labs in 00:05:31.829 --> 00:05:34.529 the United States right there in Corning, New 00:05:34.529 --> 00:05:36.930 York in 1908. And this wasn't just for quality 00:05:36.930 --> 00:05:39.629 control, was it? Not at all. This was a dedicated 00:05:39.629 --> 00:05:43.170 allocation of resources to pure scientific discovery 00:05:43.170 --> 00:05:46.610 right inside the company structure. This decision 00:05:46.610 --> 00:05:49.069 to invest systematically in chemistry and physics, 00:05:49.290 --> 00:05:52.670 not just perfecting existing manufacturing techniques, 00:05:52.949 --> 00:05:55.430 was absolutely foundational. I mean, you can 00:05:55.430 --> 00:05:57.509 draw a straight line from that decision in 1908 00:05:57.509 --> 00:06:01.209 to today. You really can. Without that 1908 commitment, 00:06:01.389 --> 00:06:04.069 there is no fiber optic cable and there is certainly 00:06:04.069 --> 00:06:06.089 no Gorilla Glass. So let's look at the foundational 00:06:06.089 --> 00:06:07.990 products that came out of that R &D commitment 00:06:07.990 --> 00:06:10.990 before World War II. The first major industrial 00:06:10.990 --> 00:06:13.329 application that really cemented their importance 00:06:13.329 --> 00:06:17.790 globally was illumination. Precisely. Early on, 00:06:17.889 --> 00:06:19.750 Corning didn't invent the light bulb itself, 00:06:20.050 --> 00:06:22.430 but they invented the process for making the 00:06:22.430 --> 00:06:25.470 glass envelopes, the bulbs themselves, cheaply 00:06:25.470 --> 00:06:27.990 and at a massive scale. Which is really the key 00:06:27.990 --> 00:06:29.829 to commercialization, isn't it? It's everything. 00:06:29.930 --> 00:06:32.610 They supplied the glass for Thomas Edison's original 00:06:32.610 --> 00:06:34.970 light bulb, and this partnership was sustained. 00:06:35.350 --> 00:06:38.470 After the 1892 merger that created General Electric, 00:06:38.769 --> 00:06:42.170 Corning remained a core glass supplier for GE's 00:06:42.170 --> 00:06:45.019 massive, growing lighting division. That's a 00:06:45.019 --> 00:06:47.339 powerful early partnership, defining them as 00:06:47.339 --> 00:06:50.319 a high -volume industrial supplier. But the next 00:06:50.319 --> 00:06:52.639 product launch is the one that every single listener 00:06:52.639 --> 00:06:55.139 probably knows. Oh, yeah. Even if they don't 00:06:55.139 --> 00:06:57.439 connect it to the modern industrial giant we're 00:06:57.439 --> 00:06:59.120 talking about today. The Kitchen Revolution, 00:06:59.439 --> 00:07:02.300 brought to you by Pyrex. Exactly. The Pyrex launch 00:07:02.300 --> 00:07:05.220 in 1915 was a total game -changer for the American 00:07:05.220 --> 00:07:07.579 consumer, and it was a byproduct of material 00:07:07.579 --> 00:07:09.920 science they developed for something completely 00:07:09.920 --> 00:07:12.360 different. What was that? Railway lantern lenses. 00:07:12.959 --> 00:07:15.540 Those lenses needed to withstand really rapid 00:07:15.540 --> 00:07:18.139 temperature shifts, like a hot lantern being 00:07:18.139 --> 00:07:21.360 splashed by cold rain without cracking. And that's 00:07:21.360 --> 00:07:23.839 where the special glass formula came from. That's 00:07:23.839 --> 00:07:26.699 it. That core borosilicate glass formula, with 00:07:26.699 --> 00:07:29.480 its incredibly low coefficient of thermal expansion, 00:07:29.779 --> 00:07:32.800 was adapted for the kitchen. So if I understand 00:07:32.800 --> 00:07:35.180 the science here, standard glass shatters when 00:07:35.180 --> 00:07:38.000 it heats unevenly because one part expands faster 00:07:38.000 --> 00:07:40.360 than another, causing stress. You nailed it. 00:07:40.420 --> 00:07:44.300 But borosilicate glass, like Pyrex, it resists 00:07:44.300 --> 00:07:47.220 that expansion almost entirely. Right. Pyrex 00:07:47.220 --> 00:07:49.259 holds the distinction of being the first ever 00:07:49.259 --> 00:07:51.920 consumer cooking product made with temperature 00:07:51.920 --> 00:07:54.930 -resistant glass. It allowed people to move food 00:07:54.930 --> 00:07:57.589 directly from the oven to the refrigerator, which 00:07:57.589 --> 00:08:00.529 revolutionized food prep, storage and cleaning. 00:08:00.670 --> 00:08:02.930 Yeah. It basically democratized heat safe cooking. 00:08:03.050 --> 00:08:05.069 It's incredible. So you go from the revolutionary 00:08:05.069 --> 00:08:07.430 kitchen counter to the deepest reaches of the 00:08:07.430 --> 00:08:10.750 cosmos. The Corning trajectory just keeps expanding. 00:08:10.850 --> 00:08:13.470 It really does. The Palomar Observatory mirror 00:08:13.470 --> 00:08:16.250 casting project, fabricated between 1934 and 00:08:16.250 --> 00:08:19.290 1936, remains an unbelievable feat of engineering. 00:08:19.870 --> 00:08:21.910 This project just goes to show you the company's 00:08:21.910 --> 00:08:23.970 willingness to tackle challenges that others 00:08:23.970 --> 00:08:26.730 deemed impossible. George Ellery Hale from the 00:08:26.730 --> 00:08:28.790 California Institute of Technology approached 00:08:28.790 --> 00:08:31.329 them with a task. To build a massive telescope 00:08:31.329 --> 00:08:35.210 mirror? A massive 200 inch or 5 .1 meter telescope 00:08:35.210 --> 00:08:38.389 mirror. And it wasn't just the size, it was the 00:08:38.389 --> 00:08:41.809 material requirement. Low expansion borosilicate 00:08:41.809 --> 00:08:45.269 glass. So why was that low expansion part so 00:08:45.269 --> 00:08:48.549 critical for a massive telescope mirror? Thermal 00:08:48.549 --> 00:08:51.110 stability is everything in high resolution optics. 00:08:51.330 --> 00:08:53.830 I mean everything. If the mirror surface slightly 00:08:53.830 --> 00:08:56.850 changes shape. Even by a tiny fraction of a millimeter 00:08:56.850 --> 00:08:58.730 due to temperature fluctuations over the course 00:08:58.730 --> 00:09:01.350 of a night, the star image will blur into nothing. 00:09:01.509 --> 00:09:03.710 So a 200 -inch mirror made of standard glass 00:09:03.710 --> 00:09:06.769 would be totally useless. It would warp catastrophically. 00:09:06.809 --> 00:09:08.970 The only way to ensure perfect optical fidelity 00:09:08.970 --> 00:09:12.629 was to use borosilicate glass, which barely changes 00:09:12.629 --> 00:09:14.889 shape with temperature swings. They were attempting 00:09:14.889 --> 00:09:17.269 to achieve optical perfection on a monumental 00:09:17.269 --> 00:09:20.840 scale. And the casting process itself was fraught 00:09:20.840 --> 00:09:22.639 with difficulty. I understand they failed on 00:09:22.639 --> 00:09:24.720 the first attempt, which tells you just how steep 00:09:24.720 --> 00:09:27.100 that learning curve was. It was a very high stakes 00:09:27.100 --> 00:09:29.879 failure. Cording's first attempt resulted in 00:09:29.879 --> 00:09:32.940 a cast blank with voids and structural imperfections. 00:09:33.000 --> 00:09:35.120 So they had to scrap it. They had to scrap that 00:09:35.120 --> 00:09:38.720 massive piece of glass. But true to their R &D 00:09:38.720 --> 00:09:41.750 culture, they used the lessons learned. the cooling 00:09:41.750 --> 00:09:44.210 rates, the furnace operation, the material flow 00:09:44.210 --> 00:09:47.269 to inform the second attempt. And even after 00:09:47.269 --> 00:09:49.549 the successful second casting, the logistics 00:09:49.549 --> 00:09:51.649 were just staggering. It wasn't like, you know, 00:09:51.669 --> 00:09:54.830 baking a cake. Oh, far from it. That massive 00:09:54.830 --> 00:09:57.309 200 -inch blank couldn't just be pulled out of 00:09:57.309 --> 00:10:00.789 the furnace. It had to cool incredibly slowly 00:10:00.789 --> 00:10:03.990 and carefully to prevent internal stresses from 00:10:03.990 --> 00:10:06.789 shattering it. How slowly? The cooling process 00:10:06.789 --> 00:10:09.750 for that single piece of glass took a full year. 00:10:09.929 --> 00:10:12.929 A whole year. Wow. A whole year. And during that 00:10:12.929 --> 00:10:15.090 year, while it was delicately sitting in its 00:10:15.090 --> 00:10:17.610 annealing oven, the whole facility in Corning, 00:10:17.690 --> 00:10:20.549 New York, was almost lost to a devastating flood. 00:10:20.789 --> 00:10:22.710 You're kidding. The idea that a technological 00:10:22.710 --> 00:10:25.330 marvel, which took a year to cool, was threatened 00:10:25.330 --> 00:10:28.110 by a natural disaster is just an incredible anecdote. 00:10:28.450 --> 00:10:30.429 It really highlights the vulnerability of these 00:10:30.429 --> 00:10:33.029 large -scale scientific undertakings. And for 00:10:33.029 --> 00:10:35.029 those interested in the, you know, the archaeology 00:10:35.029 --> 00:10:38.029 of technology, that failed first blank still 00:10:38.029 --> 00:10:41.269 exists. It does. It now resides in the Corning 00:10:41.269 --> 00:10:44.919 Museum of Glass. A physical monument to a scientific 00:10:44.919 --> 00:10:47.340 attempt that provided the necessary knowledge 00:10:47.340 --> 00:10:49.559 for the eventual success. It's a perfect symbol 00:10:49.559 --> 00:10:51.740 of their commitment, isn't it? Failures aren't 00:10:51.740 --> 00:10:54.000 just discarded, they are artifacts of learning. 00:10:54.360 --> 00:10:57.039 Exactly. And before we move into the post -war 00:10:57.039 --> 00:11:00.080 era, we should briefly mention the 1935 partnership 00:11:00.080 --> 00:11:02.659 with Owens, Illinois. This collaboration led 00:11:02.659 --> 00:11:05.139 to the formation of Owens Corning. Which became 00:11:05.139 --> 00:11:08.600 its own giant. It did. It spun off in 1938 and 00:11:08.600 --> 00:11:11.220 became a leader in building materials and fiberglass. 00:11:12.000 --> 00:11:14.940 It just shows Corning's early, broad involvement 00:11:14.940 --> 00:11:17.500 in material science that extended far beyond 00:11:17.500 --> 00:11:19.980 traditional lighting or consumer goods. So by 00:11:19.980 --> 00:11:22.419 the 1940s, Corning was established as a master 00:11:22.419 --> 00:11:25.440 of precision glass fabrication, a reliable supplier 00:11:25.440 --> 00:11:29.120 to giants like GE, and a consumer icon with Pyrex. 00:11:29.340 --> 00:11:31.519 The next few decades, however, would be defined 00:11:31.519 --> 00:11:34.240 by the high stakes, internal R &D projects that 00:11:34.240 --> 00:11:36.159 changed absolutely everything. Yeah, this is 00:11:36.159 --> 00:11:38.980 where things get really interesting. The 1960s 00:11:38.980 --> 00:11:41.559 bring us to the centerpiece of Corning's modern 00:11:41.559 --> 00:11:45.000 resurrection story. The Chem Corps project, introduced 00:11:45.000 --> 00:11:49.230 in 1962. This project, intended for the automotive 00:11:49.230 --> 00:11:52.610 industry, is the absolute prime example of a 00:11:52.610 --> 00:11:55.450 costly commercial failure that later provided 00:11:55.450 --> 00:11:58.629 crucial, highly valuable intellectual property. 00:11:59.070 --> 00:12:01.090 This is the part of the story that connects the 00:12:01.090 --> 00:12:03.190 past and the future of the company so perfectly. 00:12:04.009 --> 00:12:07.029 Chemcor was designed to create a new, toughened 00:12:07.029 --> 00:12:09.950 automobile windshield. Right. The goal was to 00:12:09.950 --> 00:12:13.750 make glass that was thinner, lighter, and shatter 00:12:13.750 --> 00:12:16.659 -resistant. It was designed to break into small, 00:12:16.820 --> 00:12:19.539 harmless granules when smashed, which would vastly 00:12:19.539 --> 00:12:21.899 reduce injuries compared to standard laminated 00:12:21.899 --> 00:12:24.559 glass. So they were trying to disrupt the gigantic 00:12:24.559 --> 00:12:27.259 auto market. A huge market. But the technology 00:12:27.259 --> 00:12:30.000 wasn't just physical tempering. It was a sophisticated 00:12:30.000 --> 00:12:32.240 chemical process. We should probably unpack that 00:12:32.240 --> 00:12:34.580 a bit. Yeah. What was the technological innovation 00:12:34.580 --> 00:12:37.539 behind Chemcor? The key was something called 00:12:37.539 --> 00:12:40.000 an ion exchange process, and that was paired 00:12:40.000 --> 00:12:42.200 with what Corning called its fusion process. 00:12:42.519 --> 00:12:45.139 How does ion exchange work? Okay, so you take 00:12:45.139 --> 00:12:47.799 a piece of specialized glass, and you immerse 00:12:47.799 --> 00:12:50.919 it in a hot bath of molten potassium salt. The 00:12:50.919 --> 00:12:53.360 smaller sodium ions in the glass migrate out, 00:12:53.460 --> 00:12:56.460 and the larger potassium ions from the bath rush 00:12:56.460 --> 00:12:58.759 in to replace them. So you're swapping a small 00:12:58.759 --> 00:13:01.500 ion for a bigger one. Why does that matter so 00:13:01.500 --> 00:13:03.460 much? Well, when those larger potassium ions 00:13:03.460 --> 00:13:06.059 squeeze into the space previously occupied by 00:13:06.059 --> 00:13:08.860 the smaller sodium ions, they create this immense 00:13:08.860 --> 00:13:11.919 permanent compressive stress on the glass surface. 00:13:12.159 --> 00:13:14.240 And glass breaks under tension, not compression. 00:13:14.580 --> 00:13:16.740 Exactly. Glass breaks when the surface is pulled 00:13:16.740 --> 00:13:19.500 or in tension. So by putting the surface permanently 00:13:19.500 --> 00:13:21.899 under compression, you make it far, far harder 00:13:21.899 --> 00:13:23.919 to crack or scratch. And what about the fusion 00:13:23.919 --> 00:13:26.539 process? That was Corning's proprietary method 00:13:26.539 --> 00:13:28.940 for drawing the glass into extremely thin, flat, 00:13:29.059 --> 00:13:31.960 and pristine sheets. They invested massive capital 00:13:31.960 --> 00:13:34.460 and bespoke infrastructure for this, building 00:13:34.460 --> 00:13:37.019 special furnaces in their Christiansburg, Virginia, 00:13:37.259 --> 00:13:40.679 facility dedicated specifically to this innovative 00:13:40.679 --> 00:13:43.639 Chemcor manufacturing. So it was a complete end 00:13:43.639 --> 00:13:45.840 -to -end investment in a radical new material 00:13:45.840 --> 00:13:49.299 and a new manufacturing technique. Totally. They 00:13:49.299 --> 00:13:52.159 had superior technology, massive investment, 00:13:52.340 --> 00:13:55.419 and a gigantic market opportunity. So where did 00:13:55.419 --> 00:13:57.860 the commercial failure actually happen? The market 00:13:57.860 --> 00:13:59.879 just didn't care about superiority. It cared 00:13:59.879 --> 00:14:03.259 about cost. Chemicore was installed as side glass 00:14:03.259 --> 00:14:05.559 in some limited runs. You could find it in some 00:14:05.559 --> 00:14:08.259 1968 Plymouth Barracudas and Dodge Darts. Okay. 00:14:08.759 --> 00:14:11.279 And the Chemcor windshields debuted on the 1970 00:14:11.279 --> 00:14:14.440 AMXs and Javelins built by American Motors Corporation. 00:14:15.519 --> 00:14:19.039 But the big automakers, like GM and Ford, they 00:14:19.039 --> 00:14:21.519 had zero financial incentive to switch. And why 00:14:21.519 --> 00:14:24.200 was that? Because there were no mandatory safety 00:14:24.200 --> 00:14:26.519 standards requiring this kind of glass yet, right? 00:14:26.639 --> 00:14:28.840 That's the whole story. They invented a better, 00:14:28.960 --> 00:14:32.120 safer product. But if the cheaper existing product 00:14:32.120 --> 00:14:34.879 met the current regulations, the automakers just 00:14:34.879 --> 00:14:36.879 wouldn't absorb the higher cost. So the investment 00:14:36.879 --> 00:14:38.980 was sunk. The investment was sunk. The market 00:14:38.980 --> 00:14:41.860 refused to pay. And Corning terminated the project 00:14:41.860 --> 00:14:45.220 in 1971. It was officially labeled, both internally 00:14:45.220 --> 00:14:47.320 and externally, as one of the company's biggest 00:14:47.320 --> 00:14:49.860 and most expensive failures. They invested in 00:14:49.860 --> 00:14:52.960 R &D, built specialized furnaces, and then walked 00:14:52.960 --> 00:14:55.580 away after losing millions and millions of dollars. 00:14:55.879 --> 00:14:59.039 They did. But what this all means for our listener, 00:14:59.240 --> 00:15:03.320 this failure is the key to understanding the 00:15:03.320 --> 00:15:06.200 company's entire modern identity. It really is. 00:15:06.240 --> 00:15:08.159 It's the ultimate case study in technological 00:15:08.159 --> 00:15:12.320 patients and IP synthesis. Exactly. The unique 00:15:12.320 --> 00:15:15.220 processes, the ion exchange and the fusion techniques 00:15:15.220 --> 00:15:17.779 that were developed and perfected for this failed 00:15:17.779 --> 00:15:21.379 1960s auto glass were later resurrected. Decades 00:15:21.379 --> 00:15:23.059 later. And they became the technical foundation 00:15:23.059 --> 00:15:25.759 for two of Corning's most profitable ventures. 00:15:25.860 --> 00:15:29.379 Their LCD display glass business. And most critically, 00:15:29.679 --> 00:15:32.320 the material science was reborn as Gorilla Glass. 00:15:32.700 --> 00:15:35.480 The failure was never in the material, only in 00:15:35.480 --> 00:15:37.820 the timing in the application. That is the crucial 00:15:37.820 --> 00:15:41.000 takeaway. The glass on your 2024 smartphone is 00:15:41.000 --> 00:15:43.940 based on a failed 1960s attempt to upgrade a 00:15:43.940 --> 00:15:46.179 Dodge Dart. I mean, when you put it like that. 00:15:46.320 --> 00:15:48.240 It proves that the proprietary material science 00:15:48.240 --> 00:15:50.860 is the company's real product, not the finished 00:15:50.860 --> 00:15:53.600 consumer good. It absolutely secured their resilience. 00:15:53.840 --> 00:15:56.799 But the 1970s also brought a second, equally 00:15:56.799 --> 00:15:59.200 monumental disruption. And this one was an immediate 00:15:59.200 --> 00:16:01.820 overwhelming success. The dawn of optical communications. 00:16:02.240 --> 00:16:05.059 This truly reshaped the modern world, perhaps 00:16:05.059 --> 00:16:07.340 more than any other single invention of that 00:16:07.340 --> 00:16:09.590 era. This is the moment they stopped using copper 00:16:09.590 --> 00:16:11.970 and started using light to transmit information 00:16:11.970 --> 00:16:15.350 across the globe. So in late 1970, four Corning 00:16:15.350 --> 00:16:17.769 researchers, and we should name them, Robert 00:16:17.769 --> 00:16:20.330 Moore, Donald Keck, Peter Schultz, and Frank 00:16:20.330 --> 00:16:23.330 Simar, they demonstrated a monumental breakthrough. 00:16:23.649 --> 00:16:26.649 An optical fiber with incredibly low optical 00:16:26.649 --> 00:16:29.070 attenuation. We need to spend a moment on attenuation 00:16:29.070 --> 00:16:31.129 because that is the critical factor here. It's 00:16:31.129 --> 00:16:34.649 basically signal loss over distance. Before Corning's 00:16:34.649 --> 00:16:37.070 work, fiber optics were a theoretical curiosity. 00:16:37.259 --> 00:16:40.120 Right. Unusable for telecommunications. Completely 00:16:40.120 --> 00:16:42.679 unusable. Earlier fiber designs had extremely 00:16:42.679 --> 00:16:45.059 high signal loss. We're talking about attenuation 00:16:45.059 --> 00:16:46.840 rates that would drop the signal strength by 00:16:46.840 --> 00:16:48.919 ninety nine percent within just a few hundred 00:16:48.919 --> 00:16:51.879 meters. So is impractical outside of a lab bench. 00:16:52.100 --> 00:16:54.659 Totally. Corning's initial finding, which they 00:16:54.659 --> 00:16:57.080 achieved by doping silica glass with titanium, 00:16:57.340 --> 00:17:00.759 was 17 decibels per kilometer. And why was 17 00:17:00.759 --> 00:17:04.400 dbc so revolutionary? It was revolutionary because 00:17:04.400 --> 00:17:06.900 it proved that light could carry data. over useful 00:17:06.900 --> 00:17:09.900 distances, seven kilometers, which meant the 00:17:09.900 --> 00:17:12.279 technology was no longer just theoretical. It 00:17:12.279 --> 00:17:14.859 was the proof of concept that scaling was possible. 00:17:15.099 --> 00:17:18.140 The target for true telecommunication feasibility 00:17:18.140 --> 00:17:20.759 was generally considered to be 20 dB kilometers 00:17:20.759 --> 00:17:24.019 or less. And Corning just smashed that goal on 00:17:24.019 --> 00:17:26.640 their first real attempt. They did. And the refinement 00:17:26.640 --> 00:17:29.019 came almost immediately, which confirmed their 00:17:29.019 --> 00:17:31.160 lead. Right. They soon produced an even better 00:17:31.160 --> 00:17:33.740 fiber, achieving a remarkable attenuation of 00:17:33.740 --> 00:17:37.250 only four dB kilometers. This time, they used 00:17:37.250 --> 00:17:40.069 germanium oxide as the core dopant. And that 00:17:40.069 --> 00:17:42.990 was the true game changer. That was it. That 00:17:42.990 --> 00:17:46.309 4 dB kilometer loss meant data could travel thousands 00:17:46.309 --> 00:17:48.829 of kilometers with only periodic signal boosting. 00:17:49.029 --> 00:17:51.589 It was the technical step that made transcontinental 00:17:51.589 --> 00:17:54.150 and transoceanic networking scalable. And the 00:17:54.150 --> 00:17:57.109 impact was instantaneous and permanent. They 00:17:57.109 --> 00:17:59.089 didn't just invent the material. They secured 00:17:59.089 --> 00:18:01.720 their position as the manufacturing leader. They 00:18:01.720 --> 00:18:04.240 invented the processes required to draw that 00:18:04.240 --> 00:18:06.660 high purity glass into kilometers of hair thin, 00:18:06.819 --> 00:18:09.119 perfect fiber. And that made them the world's 00:18:09.119 --> 00:18:11.619 leading manufacturer of optical fiber. Immediately. 00:18:12.140 --> 00:18:14.000 And they still are. They laid the foundation 00:18:14.000 --> 00:18:17.000 for the high -speed data backbone of the modern 00:18:17.000 --> 00:18:19.779 Internet infrastructure. Now, before we leave 00:18:19.779 --> 00:18:22.200 the 70s, it's worth noting that these technical 00:18:22.200 --> 00:18:25.599 triumphs were often accompanied by some internal 00:18:25.599 --> 00:18:27.400 operational struggles. We should mention the 00:18:27.400 --> 00:18:30.119 Z Glass project from 1977. Yeah, the Z Glass 00:18:30.119 --> 00:18:32.559 project, which was intended for television picture 00:18:32.559 --> 00:18:35.859 tubes, it illustrates that success wasn't guaranteed 00:18:35.859 --> 00:18:39.109 just because they had the R &D prowess. It was 00:18:39.109 --> 00:18:41.130 a necessary product for the TV market at the 00:18:41.130 --> 00:18:43.750 time, but the manufacturing processes proved 00:18:43.750 --> 00:18:46.349 incredibly challenging. Leading to high defects 00:18:46.349 --> 00:18:49.130 and internal friction. It was considered a steep 00:18:49.130 --> 00:18:51.269 loss in profit and productivity at the time. 00:18:51.289 --> 00:18:53.730 The operational difficulties were so significant 00:18:53.730 --> 00:18:56.230 that it was later studied as a Harvard School 00:18:56.230 --> 00:18:58.849 of Business case study. Which just underscores 00:18:58.849 --> 00:19:01.089 that Corning's history is littered with these 00:19:01.089 --> 00:19:04.049 massive internal operational challenges, even 00:19:04.049 --> 00:19:05.890 as they were innovating new materials. Right. 00:19:05.950 --> 00:19:10.390 The 1970s truly were a defining decade. A massive 00:19:10.390 --> 00:19:12.529 automotive failure that planted the seeds for 00:19:12.529 --> 00:19:14.970 the smartphone and a technological breakthrough 00:19:14.970 --> 00:19:17.220 that planted the seeds for the Internet. It's 00:19:17.220 --> 00:19:19.819 hard to imagine a more impactful decade for a 00:19:19.819 --> 00:19:22.160 materials company. It really can't. So now we 00:19:22.160 --> 00:19:24.779 move into the 1990s, where the technological 00:19:24.779 --> 00:19:27.079 necessities of the market forced the company 00:19:27.079 --> 00:19:30.619 to make a hard strategic choice, abandoning their 00:19:30.619 --> 00:19:33.019 consumer identity entirely. And then surviving 00:19:33.019 --> 00:19:36.289 a cataclysmic market crash. That strategic pivot 00:19:36.289 --> 00:19:40.769 in 1998 is so crucial. They essentially liquidated 00:19:40.769 --> 00:19:43.349 their emotional ties to the American household 00:19:43.349 --> 00:19:45.950 kitchen. That must have been a difficult cultural 00:19:45.950 --> 00:19:48.589 shift internally. It was a massive psychological 00:19:48.589 --> 00:19:51.970 and structural shift. Corning Inc. divested its 00:19:51.970 --> 00:19:54.910 entire consumer product line. Pyrex, Corningware, 00:19:55.069 --> 00:19:57.960 Visions, Corel. All of it. They sold the whole 00:19:57.960 --> 00:20:00.440 division off. The entire subsidiary to Borden, 00:20:00.519 --> 00:20:02.920 which eventually became Correll Brands. And this 00:20:02.920 --> 00:20:06.019 move was absolute. Corning Inc. ceased manufacturing 00:20:06.019 --> 00:20:08.700 or marketing consumer products entirely, focusing 00:20:08.700 --> 00:20:11.319 solely on high margin, high value industrial 00:20:11.319 --> 00:20:14.019 and scientific applications. It's a classic example 00:20:14.019 --> 00:20:16.500 of a company choosing to specialize where they 00:20:16.500 --> 00:20:19.480 have a true proprietary technological edge, isn't 00:20:19.480 --> 00:20:22.579 it? It is. Rather than competing in the increasingly 00:20:22.579 --> 00:20:25.920 low margin, high marketing consumer goods sector. 00:20:26.829 --> 00:20:29.230 They decided their value was in the furnace, 00:20:29.450 --> 00:20:32.470 not on the supermarket shelf. And that strategic 00:20:32.470 --> 00:20:35.390 specialization perfectly positioned them to ride 00:20:35.390 --> 00:20:39.250 the wave of the late 90s dot -com boom. Perfectly. 00:20:39.289 --> 00:20:42.690 Their deep focus on optical fiber meant profits 00:20:42.690 --> 00:20:45.869 soared as telecommunications companies raced 00:20:45.869 --> 00:20:47.589 to build out the high -speed network infrastructure 00:20:47.589 --> 00:20:50.990 globally. Corning expanded its fiber operations 00:20:50.990 --> 00:20:53.930 significantly, acquiring companies like Oak Industries 00:20:53.930 --> 00:20:56.680 and building several new Mavs of plants. But 00:20:56.680 --> 00:20:58.660 didn't they fly a little too close to the sun 00:20:58.660 --> 00:21:00.519 during that boom? They weren't satisfied just 00:21:00.519 --> 00:21:03.059 being a component supplier, were they? No, they 00:21:03.059 --> 00:21:05.299 absolutely stretched for more market control. 00:21:05.500 --> 00:21:07.779 They invested heavily in the photonics market 00:21:07.779 --> 00:21:10.180 components that manage light signals with the 00:21:10.180 --> 00:21:12.019 ambitious goal of becoming the leading provider 00:21:12.019 --> 00:21:14.319 of complete end -to -end fiber optic systems. 00:21:14.579 --> 00:21:16.839 They wanted to control more of the telecom value 00:21:16.839 --> 00:21:19.039 chain. They wanted to integrate vertically. Yeah. 00:21:19.099 --> 00:21:20.900 And that's where the massive market crash hit. 00:21:21.319 --> 00:21:24.259 That ambition met reality very, very hard around 00:21:24.259 --> 00:21:26.869 the year 2000. The collapse of the dotcom market 00:21:26.869 --> 00:21:30.529 was brutal and fast. And because the company 00:21:30.529 --> 00:21:33.089 had overextended itself, particularly in that 00:21:33.089 --> 00:21:35.809 risky photonics venture, the failure of that 00:21:35.809 --> 00:21:38.910 market had a catastrophic impact. Telecom companies 00:21:38.910 --> 00:21:40.630 just stopped building network infrastructure 00:21:40.630 --> 00:21:43.829 overnight. And the company faced enormous write 00:21:43.829 --> 00:21:47.230 downs and job losses. The stock plummeted. It 00:21:47.230 --> 00:21:48.950 went all the way down to one dollar per share. 00:21:49.339 --> 00:21:51.859 For a company that had existed for nearly 150 00:21:51.859 --> 00:21:55.519 years with such deep community ties in upstate 00:21:55.519 --> 00:21:58.740 New York, what was the internal atmosphere like 00:21:58.740 --> 00:22:01.660 when the stock hit a dollar? That suggests genuine 00:22:01.660 --> 00:22:04.660 panic. It was a true crisis. There were mass 00:22:04.660 --> 00:22:06.900 layoffs across the board and the company faced 00:22:06.900 --> 00:22:09.769 severe scrutiny. However, despite the financial 00:22:09.769 --> 00:22:12.269 disaster and the near -death experience, the 00:22:12.269 --> 00:22:14.730 company demonstrated incredible resilience. How 00:22:14.730 --> 00:22:17.250 did they do it? They jettisoned the failed photonics 00:22:17.250 --> 00:22:19.470 ambition, and they doubled down on their core 00:22:19.470 --> 00:22:21.750 proprietary strength, which was manufacturing 00:22:21.750 --> 00:22:24.130 the glass itself, and returned to financial stability. 00:22:24.450 --> 00:22:26.589 And their recovery trajectory confirms that strategy 00:22:26.589 --> 00:22:30.069 worked. It did. By 2007, they had posted five 00:22:30.069 --> 00:22:32.289 straight years of improving financial performance. 00:22:33.049 --> 00:22:35.230 They successfully navigated out of the crisis 00:22:35.230 --> 00:22:38.549 by focusing exclusively on the core proprietary 00:22:38.549 --> 00:22:41.029 material science they had protected all along. 00:22:41.390 --> 00:22:45.250 The established fiber business and, crucially, 00:22:45.430 --> 00:22:48.730 their display business with LCD glass. They emerged 00:22:48.730 --> 00:22:51.849 leaner, strategically sharper, and focused entirely 00:22:51.849 --> 00:22:54.549 on the B2B high -tech sector. Which sets us up 00:22:54.549 --> 00:22:57.380 perfectly for the ultimate comeback story. the 00:22:57.380 --> 00:22:59.460 moment Corning found the application for its 00:22:59.460 --> 00:23:01.720 decades -old R &D that would define the next 00:23:01.720 --> 00:23:04.420 two decades. The smartphone revolution. This 00:23:04.420 --> 00:23:06.440 is the turning point that secured Corning's modern 00:23:06.440 --> 00:23:09.140 identity and justified every investment and every 00:23:09.140 --> 00:23:12.539 risk taken since the 1960s. The opportunity arose 00:23:12.539 --> 00:23:14.980 when Apple, developing the first revolutionary 00:23:14.980 --> 00:23:17.880 iPhone, approached them in the mid -2000s. Right. 00:23:18.119 --> 00:23:20.619 Steve Jobs needed a tough, scratch -resistant 00:23:20.619 --> 00:23:22.420 display screen that could handle the wear and 00:23:22.420 --> 00:23:24.359 tear of being constantly touched and carried 00:23:24.359 --> 00:23:26.880 in a pocket. Standard plastic or cheap glass 00:23:26.880 --> 00:23:28.920 just couldn't do it. The entire user experience 00:23:28.920 --> 00:23:31.279 hinged on the durability of that screen. So what 00:23:31.279 --> 00:23:33.190 did Corning do? They didn't start from scratch. 00:23:33.430 --> 00:23:35.829 They reached back into their vast intellectual 00:23:35.829 --> 00:23:38.990 property archive and resurrected the technology 00:23:38.990 --> 00:23:42.009 developed for Chemcor in the 1960s. So Gorilla 00:23:42.009 --> 00:23:45.509 Glass, which debuted on the first iPhone in 2007, 00:23:45.789 --> 00:23:48.910 is a direct outgrowth of that failed automotive 00:23:48.910 --> 00:23:51.910 project. A direct, perfected outgrowth. It's 00:23:51.910 --> 00:23:54.890 a high -strength, alkali -aluminosilicate thin 00:23:54.890 --> 00:23:57.849 sheet glass. So the technology that was too good 00:23:57.849 --> 00:24:00.170 and too expensive to convince Detroit 60 years 00:24:00.170 --> 00:24:02.259 ago was the only technology... good enough to 00:24:02.259 --> 00:24:04.720 convince Silicon Valley. You've got it. The durability 00:24:04.720 --> 00:24:07.380 and scratch resistance inherent in that chemically 00:24:07.380 --> 00:24:10.720 hardened ion -exchanged glass formula proved 00:24:10.720 --> 00:24:13.339 absolutely perfect for touchscreens. It allowed 00:24:13.339 --> 00:24:15.859 Apple to launch a device that was truly revolutionary. 00:24:16.180 --> 00:24:18.119 And it immediately established Gorilla Glass 00:24:18.119 --> 00:24:20.339 as the industry standard for portable device 00:24:20.339 --> 00:24:22.859 screens. And the proprietary fusion process they 00:24:22.859 --> 00:24:25.180 perfected for ChemCore was adapted to create 00:24:25.180 --> 00:24:27.759 these thin, pristine sheets that were perfectly 00:24:27.759 --> 00:24:30.099 suited for modern displays. And the partnership 00:24:30.099 --> 00:24:32.339 with Apple has only deepened since then, which 00:24:32.339 --> 00:24:35.000 really highlights Apple's reliance on Corning's 00:24:35.000 --> 00:24:37.640 specific proprietary manufacturing capabilities. 00:24:38.220 --> 00:24:40.759 Oh, it's far from an off the shelf product. Apple 00:24:40.759 --> 00:24:43.119 has made significant direct investments into 00:24:43.119 --> 00:24:45.940 Corning's infrastructure. They rely on Corning's 00:24:45.940 --> 00:24:48.799 unique ability to scale this complex manufacturing. 00:24:49.039 --> 00:24:51.160 How much have they invested? There was an initial 00:24:51.160 --> 00:24:55.119 U .S. $200 million investment in 2017. Followed 00:24:55.119 --> 00:24:57.799 by an additional U .S. $250 million in 2019, 00:24:58.039 --> 00:25:00.920 all channeled through Apple's Advanced Manufacturing 00:25:00.920 --> 00:25:03.339 Fund. And that capital infusion helps Corning 00:25:03.339 --> 00:25:05.759 continually expand and refine the specialized 00:25:05.759 --> 00:25:08.059 production lines. Exactly. To meet the global 00:25:08.059 --> 00:25:10.859 demand for iPhones, Apple Watches, and iPads. 00:25:11.019 --> 00:25:13.359 So Gorilla Glass is the high -profile anchor. 00:25:13.559 --> 00:25:15.380 But let's detail the current revenue structure. 00:25:15.799 --> 00:25:19.460 Corning generated U .S. $13 .1 billion in revenue 00:25:19.460 --> 00:25:22.539 based on 2024 data. And that comes from a highly 00:25:22.539 --> 00:25:24.519 diversified base of... specialized industrial 00:25:24.519 --> 00:25:26.920 products. Let's start with display technologies. 00:25:27.339 --> 00:25:30.220 Display tech is massive. Corning is the leading 00:25:30.220 --> 00:25:32.799 global manufacturer of the glass substrates needed 00:25:32.799 --> 00:25:35.460 for LCD technology. The technical requirement 00:25:35.460 --> 00:25:37.460 here is just staggering. What's so hard about 00:25:37.460 --> 00:25:39.579 it? They have to produce these gigantic sheets 00:25:39.579 --> 00:25:42.480 of glass that are perfectly flat, perfectly pure, 00:25:42.599 --> 00:25:45.299 and uniform across their entire surface with 00:25:45.299 --> 00:25:48.039 no bubbles or flaws. And they proudly note this 00:25:48.039 --> 00:25:49.980 glass substrate is produced without any heavy 00:25:49.980 --> 00:25:52.000 metals. And when you say gigantic sheets, we 00:25:52.000 --> 00:25:53.920 need to convey the scale for the listener. This 00:25:53.920 --> 00:25:56.960 isn't windowpane glass. No. Not even close. We're 00:25:56.960 --> 00:25:59.279 talking about glass substrates so large that 00:25:59.279 --> 00:26:01.940 they are categorized by generations. Corning 00:26:01.940 --> 00:26:04.319 has expanded facilities in Japan, including a 00:26:04.319 --> 00:26:06.740 Gen 10 facility co -located with the Sharp Corporation 00:26:06.740 --> 00:26:10.140 Complex in Sakai, Osaka. How big is a Gen 10 00:26:10.140 --> 00:26:12.859 glass substrate? It's approximately three meters 00:26:12.859 --> 00:26:15.660 by three meters, about the size of a king -sized 00:26:15.660 --> 00:26:18.359 bed. A single sheet of that glass can be cut 00:26:18.359 --> 00:26:20.440 into eight or more 60 -inch television screens. 00:26:20.960 --> 00:26:23.460 And manufacturing that perfect uniformity on 00:26:23.460 --> 00:26:26.119 that scale is an immense challenge. Immense. 00:26:26.299 --> 00:26:28.720 Okay. Next up, the category they call specialty 00:26:28.720 --> 00:26:31.519 materials. This really shows their wide -ranging, 00:26:31.519 --> 00:26:34.900 high -end expertise, from space mirrors to semiconductor 00:26:34.900 --> 00:26:38.619 chips. This division produces truly esoteric, 00:26:38.619 --> 00:26:41.920 mission -critical products. Look at semiconductor 00:26:41.920 --> 00:26:45.200 manufacturing. They produce high -purity fused 00:26:45.200 --> 00:26:47.599 silica, which is employed in microlithography 00:26:47.599 --> 00:26:51.920 systems. Why is fused silica necessary for microlithography? 00:26:52.339 --> 00:26:55.380 Well, microlithography is how chip manufacturers 00:26:55.380 --> 00:26:59.180 etch patterns onto silicon wafers using extreme 00:26:59.180 --> 00:27:03.720 ultraviolet, or EUV, light. Fused silica is necessary 00:27:03.720 --> 00:27:05.640 because it's one of the few materials that is 00:27:05.640 --> 00:27:07.980 perfectly transparent to that high energy UV 00:27:07.980 --> 00:27:10.420 light. So the intricate patterns can be projected 00:27:10.420 --> 00:27:13.369 accurately. Exactly. Any slight imperfection 00:27:13.369 --> 00:27:15.630 or impurity would ruin the entire chip manufacturing 00:27:15.630 --> 00:27:19.150 process. Furthermore, it has extremely low thermal 00:27:19.150 --> 00:27:21.410 expansion, which is essential for maintaining 00:27:21.410 --> 00:27:23.690 precision during the intense heating cycles. 00:27:23.849 --> 00:27:25.710 That links back perfectly to their historical 00:27:25.710 --> 00:27:27.690 expertise in dealing with extreme environments, 00:27:27.869 --> 00:27:29.789 doesn't it? Absolutely. They continue to produce 00:27:29.789 --> 00:27:31.869 the low expansion glass used to build reflective 00:27:31.869 --> 00:27:34.009 mirror blanks for next generation telescopes. 00:27:34.309 --> 00:27:36.009 And going all the way back to the Palomar era. 00:27:36.430 --> 00:27:38.450 Right. They manufactured the windows for the 00:27:38.450 --> 00:27:41.490 U .S. space shuttles and famously supplied the 00:27:41.490 --> 00:27:44.349 massive glass blank for the primary mirror in 00:27:44.349 --> 00:27:46.730 the Hubble Space Telescope. They also still produce 00:27:46.730 --> 00:27:49.890 specialized glass ceramics. They do. Things like 00:27:49.890 --> 00:27:51.829 Vicor, which is a high -temperature glass for 00:27:51.829 --> 00:27:54.690 lab use, and Nucor, which is a machinable glass 00:27:54.690 --> 00:27:57.230 ceramic used in high -precision aerospace and 00:27:57.230 --> 00:27:59.650 medical components. Then there's the core modern 00:27:59.650 --> 00:28:02.509 success we discussed, optical communications. 00:28:02.950 --> 00:28:05.299 Are they still... innovating and growing that 00:28:05.299 --> 00:28:08.400 segment or is it a mature business? It is fiercely 00:28:08.400 --> 00:28:10.700 competitive and they have to constantly innovate. 00:28:10.960 --> 00:28:13.799 They continue manufacturing vast quantities of 00:28:13.799 --> 00:28:16.480 optical fiber and cable with major operations 00:28:16.480 --> 00:28:19.559 based primarily in North Carolina. A key innovation 00:28:19.559 --> 00:28:21.640 that keeps them ahead is the ClearCurve fiber 00:28:21.640 --> 00:28:24.660 introduced in 2007. And what technical problem 00:28:24.660 --> 00:28:26.799 does ClearCurve solve for modern networking? 00:28:27.079 --> 00:28:29.480 It uses nanostructure technology to manage the 00:28:29.480 --> 00:28:32.069 light path inside the fiber. This is critical 00:28:32.069 --> 00:28:34.490 because it facilitates small radius bending without 00:28:34.490 --> 00:28:36.710 significant signal loss. Which you need for what 00:28:36.710 --> 00:28:39.789 they call FTTX installations. Fiber to the home 00:28:39.789 --> 00:28:43.269 or fiber to the business. You often have to pull 00:28:43.269 --> 00:28:46.710 fiber through tight conduits around corners and 00:28:46.710 --> 00:28:49.390 into confined residential spaces. And standard 00:28:49.390 --> 00:28:51.630 fiber would lose signal if you bent it too tightly. 00:28:51.789 --> 00:28:54.309 Precisely. The light would leak out of the core. 00:28:54.920 --> 00:28:57.440 ClearCur's nanostructure acts as an internal 00:28:57.440 --> 00:28:59.859 reflector, allowing the fiber to be bent to a 00:28:59.859 --> 00:29:02.779 really small radius, sometimes as tight as 5 00:29:02.779 --> 00:29:05.920 millimeters, without excessive attenuation. So 00:29:05.920 --> 00:29:09.039 it makes the crucial last mile of high -speed 00:29:09.039 --> 00:29:11.880 connectivity dramatically easier and more reliable 00:29:11.880 --> 00:29:14.779 to install. That's right. We should also not 00:29:14.779 --> 00:29:17.099 overlook their environmental technologies division. 00:29:17.799 --> 00:29:19.880 This segment, while maybe less exciting than 00:29:19.880 --> 00:29:22.420 smartphone screens, is critical for global pollution 00:29:22.420 --> 00:29:24.779 control standards. This division is all about 00:29:24.779 --> 00:29:27.480 emission control devices. They are a major global 00:29:27.480 --> 00:29:30.240 manufacturer of ceramic substrates for catalytic 00:29:30.240 --> 00:29:32.640 converters used in cars and light trucks with 00:29:32.640 --> 00:29:34.599 gasoline engines. And these ceramic parts have 00:29:34.599 --> 00:29:37.440 to have massive surface areas. Thousands of channels 00:29:37.440 --> 00:29:39.799 per square inch to facilitate the chemical reaction 00:29:39.799 --> 00:29:42.339 that reduces pollutants, all while withstanding 00:29:42.339 --> 00:29:45.390 extreme operating temperatures. And I understand 00:29:45.390 --> 00:29:47.410 they're heavily invested in the diesel sector 00:29:47.410 --> 00:29:50.130 as well. Yes. They're investing significantly 00:29:50.130 --> 00:29:52.630 in producing specialized ceramic emission control 00:29:52.630 --> 00:29:55.670 products for diesel engines, driven by the continually 00:29:55.670 --> 00:29:58.410 tightening global emission standards, especially 00:29:58.410 --> 00:30:01.450 in Europe and Asia. Which requires advanced porous 00:30:01.450 --> 00:30:04.109 ceramics to filter particulate matter. Exactly. 00:30:04.450 --> 00:30:07.569 It's an R &D race just as fierce as the one for 00:30:07.569 --> 00:30:10.559 phone screens. And finally, a brief but important 00:30:10.559 --> 00:30:13.440 mention of life sciences. This division applies 00:30:13.440 --> 00:30:16.099 their material science expertise to the biomedical 00:30:16.099 --> 00:30:19.119 sector. They offer products to support advanced 00:30:19.119 --> 00:30:22.119 life science research, like high -quality labware 00:30:22.119 --> 00:30:24.740 and specialized surfaces for stem cell culture 00:30:24.740 --> 00:30:28.240 products, which require extremely precise material 00:30:28.240 --> 00:30:30.880 compositions. So to maintain leadership across 00:30:30.880 --> 00:30:33.740 these five cutting -edge fields, Corning hasn't 00:30:33.740 --> 00:30:35.940 slowed down on growth or investment. Let's look 00:30:35.940 --> 00:30:38.940 at their recent acquisitions. The telecommunications 00:30:38.940 --> 00:30:41.400 segment has seen significant bolstering. They 00:30:41.400 --> 00:30:43.059 want to be an end -to -end solutions provider, 00:30:43.279 --> 00:30:46.240 moving beyond just the fiber itself. Right. In 00:30:46.240 --> 00:30:49.250 2011, they acquired mobile access networks. An 00:30:49.250 --> 00:30:51.950 Israeli company specializing in distributed antenna 00:30:51.950 --> 00:30:55.069 systems, or DAS, which are essential for seamless 00:30:55.069 --> 00:30:58.250 wireless coverage inside large, complex facilities 00:30:58.250 --> 00:31:01.410 like stadiums, airports, and university campuses. 00:31:01.690 --> 00:31:03.589 That was followed by the acquisition of SpyderCloud 00:31:03.589 --> 00:31:06.529 Wireless in 2017. And then came the largest recent 00:31:06.529 --> 00:31:09.049 expansion, which was directly aimed at market 00:31:09.049 --> 00:31:11.730 domination in the fiber sector. The 3M deal. 00:31:12.109 --> 00:31:14.069 That's right. Their most significant strategic 00:31:14.069 --> 00:31:17.730 move came in 2017 and 2018 with the acquisition 00:31:17.730 --> 00:31:20.970 of substantially all of 3M's communication market 00:31:20.970 --> 00:31:23.890 division. That was a massive transaction. A $900 00:31:23.890 --> 00:31:28.000 million cash transaction. By acquiring 3M's expertise 00:31:28.000 --> 00:31:31.200 in connectivity and fiber hardware, Corning cemented 00:31:31.200 --> 00:31:33.059 its position not just as the manufacturer of 00:31:33.059 --> 00:31:35.440 the fiber, but as a dominant provider of the 00:31:35.440 --> 00:31:38.119 entire optical communication solution, from cable 00:31:38.119 --> 00:31:40.119 to connector. And all of this is supported by 00:31:40.119 --> 00:31:42.640 a staggering R &D commitment. I mean, when you 00:31:42.640 --> 00:31:45.000 compare their investment to typical S &P 500 00:31:45.000 --> 00:31:47.039 companies, they really stand out. They absolutely 00:31:47.039 --> 00:31:49.559 do. Corning invests about 10 % of their annual 00:31:49.559 --> 00:31:52.000 revenue into research and development. For a 00:31:52.000 --> 00:31:54.759 company their size over US $13 billion in revenue, 00:31:54.920 --> 00:31:56.940 that's... That is a massive commitment. It's 00:31:56.940 --> 00:31:59.559 a key indicator of their long -term technology 00:31:59.559 --> 00:32:03.099 -first strategy. For sure. And to support this 00:32:03.099 --> 00:32:05.660 relentless push for innovation, they allocated 00:32:05.660 --> 00:32:08.779 U .S. $300 million toward further expansion of 00:32:08.779 --> 00:32:11.160 their Sullivan Park Research Facility, which 00:32:11.160 --> 00:32:12.839 is near their headquarters in Corning, New York. 00:32:12.960 --> 00:32:15.519 And despite being a multinational powerhouse 00:32:15.519 --> 00:32:18.000 with facilities all over the world, they remain 00:32:18.000 --> 00:32:21.359 fiercely tied to that small upstate New York 00:32:21.359 --> 00:32:23.710 hometown. That corporate history and cultural 00:32:23.710 --> 00:32:27.329 tie is very strong. Corning continues to maintain 00:32:27.329 --> 00:32:29.809 its world headquarters there, and management 00:32:29.809 --> 00:32:32.089 has consistently affirmed its commitment to the 00:32:32.089 --> 00:32:34.250 region. It's also worth noting the long history 00:32:34.250 --> 00:32:35.930 of Houghton family involvement and leadership. 00:32:36.329 --> 00:32:38.569 Right. James R. Houghton, the founder's great 00:32:38.569 --> 00:32:41.450 -great -grandson, served as chairman until 2007, 00:32:41.789 --> 00:32:44.910 maintaining that long institutional memory. And 00:32:44.910 --> 00:32:47.289 the current chairman and CEO, Wendell P. Weeks, 00:32:47.289 --> 00:32:50.210 has been with the company since 1983, representing 00:32:50.210 --> 00:32:52.670 that continuation of deep internal expertise. 00:32:53.009 --> 00:32:55.490 So a financially resilient, globally successful 00:32:55.490 --> 00:32:58.490 company built on proprietary technology. But 00:32:58.490 --> 00:33:00.970 proprietary control often brings modern corporate 00:33:00.970 --> 00:33:03.950 challenges, specifically regulatory scrutiny. 00:33:04.130 --> 00:33:06.829 That is the modern tension of a dominant material 00:33:06.829 --> 00:33:09.630 science player. The most recent challenge involved 00:33:09.630 --> 00:33:13.089 regulatory scrutiny in Europe. In November 2024, 00:33:13.529 --> 00:33:15.450 the European Commission announced that Corning 00:33:15.450 --> 00:33:18.190 was under investigation for potential antitrust 00:33:18.190 --> 00:33:20.809 violations. And what exactly is the commission 00:33:20.809 --> 00:33:23.869 looking into? The probe centers on the suspicion 00:33:23.869 --> 00:33:26.150 that Corning may have exclusive supply agreements 00:33:26.150 --> 00:33:29.009 with certain mobile phone manufacturers and raw 00:33:29.009 --> 00:33:31.349 glass processors. So because Corning controls 00:33:31.349 --> 00:33:33.769 the proprietary processes. Like the fusion draw 00:33:33.769 --> 00:33:36.789 process required for high quality, thin, chemically 00:33:36.789 --> 00:33:40.109 strengthened glass. These exclusive deals could 00:33:40.109 --> 00:33:42.819 potentially be. hindering competition in the 00:33:42.819 --> 00:33:44.660 specialty glass market. Effectively preventing 00:33:44.660 --> 00:33:47.339 competitors from accessing essential raw materials 00:33:47.339 --> 00:33:49.640 or technology. Exactly. It's an investigation 00:33:49.640 --> 00:33:51.940 into whether their technical dominance has led 00:33:51.940 --> 00:33:54.599 to market abuse. Which balances the picture perfectly. 00:33:54.920 --> 00:33:57.339 A necessary investigation into the practices 00:33:57.339 --> 00:33:59.720 of a company that has such proprietary control 00:33:59.720 --> 00:34:02.880 over essential cutting edge materials. Before 00:34:02.880 --> 00:34:05.259 we wrap up the commercial side. We should note 00:34:05.259 --> 00:34:09.380 the final symbolic move away from non -core operations 00:34:09.380 --> 00:34:12.159 that occurred just before the smartphone boom 00:34:12.159 --> 00:34:15.199 cemented their future. The sale of Steuben Glassworks 00:34:15.199 --> 00:34:18.760 in 2008. Right. Steuben was their high -end, 00:34:18.800 --> 00:34:22.019 beautiful art glass division. It had deep historical 00:34:22.019 --> 00:34:24.980 and cultural ties, but it was losing money, about 00:34:24.980 --> 00:34:27.340 $30 million in the five years leading up to the 00:34:27.340 --> 00:34:29.559 sale. So selling Steuben, just like divesting 00:34:29.559 --> 00:34:31.880 the kitchenware 10 years earlier. Confirmed that 00:34:31.880 --> 00:34:34.340 Corning was ruthlessly prioritizing scalable, 00:34:34.559 --> 00:34:36.719 profitable industrial and scientific materials 00:34:36.719 --> 00:34:40.340 above any legacy or artistic endeavors. It's 00:34:40.340 --> 00:34:42.980 a powerful lesson in corporate focus and ruthless 00:34:42.980 --> 00:34:45.539 efficiency. It really is. So let's bring this 00:34:45.539 --> 00:34:48.139 all together. After diving deep into nearly two 00:34:48.139 --> 00:34:50.639 centuries of innovation, crisis, and strategic 00:34:50.639 --> 00:34:54.420 pivots, what is the core thesis of Corning Incorporated's 00:34:54.420 --> 00:34:56.860 enduring success story? I think the core thesis 00:34:56.860 --> 00:35:00.199 is defined by resilience, synthesis, and focus. 00:35:01.260 --> 00:35:03.619 Corning's success is built not just on inventing 00:35:03.619 --> 00:35:06.659 new things, but on its unparalleled ability to 00:35:06.659 --> 00:35:10.059 synthesize past research failures, the ChemCore 00:35:10.059 --> 00:35:12.639 auto glass failure being the most dramatic example, 00:35:12.900 --> 00:35:15.860 into future breakthroughs like Gorilla Glass. 00:35:16.360 --> 00:35:18.860 And they strategically jettisoned highly visible 00:35:18.860 --> 00:35:22.079 and nostalgic consumer markets to focus entirely 00:35:22.079 --> 00:35:25.119 on dominating the crucial, less visible industrial 00:35:25.119 --> 00:35:27.500 and communications infrastructure sectors. They 00:35:27.500 --> 00:35:29.480 built a reputation on technological patience, 00:35:29.699 --> 00:35:32.139 understanding that the R &D payback might take 00:35:32.139 --> 00:35:34.800 50 years, but when it hits, it completely changes 00:35:34.800 --> 00:35:37.099 the world. And that commitment continues, as 00:35:37.099 --> 00:35:39.039 we noted, with their decision to continually 00:35:39.039 --> 00:35:41.420 expand their world -class research facilities 00:35:41.420 --> 00:35:43.940 and remain committed to their small, upstate 00:35:43.940 --> 00:35:46.980 New York hometown, despite being a massive multinational 00:35:46.980 --> 00:35:49.960 corporation. They are the invisible giant. If 00:35:49.960 --> 00:35:51.980 you use a computer screen, a high -speed internet 00:35:51.980 --> 00:35:54.460 connection, or a modern car, you are relying 00:35:54.460 --> 00:35:56.920 on Corning's material science. Their history 00:35:56.920 --> 00:35:58.900 shows that true technological dominance comes 00:35:58.900 --> 00:36:00.780 from controlling the fundamental building blocks 00:36:00.780 --> 00:36:03.840 of modern life. Absolutely. And as we finish 00:36:03.840 --> 00:36:05.940 this deep dive, let's leave you with a final 00:36:05.940 --> 00:36:07.800 provocative thought stemming directly from the 00:36:07.800 --> 00:36:10.019 material we analyzed today about R &D cycles 00:36:10.019 --> 00:36:12.920 and resilience. We saw how the market need for 00:36:12.920 --> 00:36:15.900 a stronger, lighter phone screen resurrected 00:36:15.900 --> 00:36:18.460 the intellectual property and unique manufacturing 00:36:18.460 --> 00:36:22.320 processes from the failed 1960s Chemcore automotive 00:36:22.320 --> 00:36:24.960 technology. Right. So given Corning's stated 00:36:24.960 --> 00:36:27.519 ongoing research investment in cutting edge areas 00:36:27.519 --> 00:36:30.420 and they explicitly mentioned things like green 00:36:30.420 --> 00:36:33.139 lasers. micro -reactors for energy production, 00:36:33.400 --> 00:36:36.480 and photovoltaics. What seemingly unrelated decades 00:36:36.480 --> 00:36:39.099 -old material science concept, maybe something 00:36:39.099 --> 00:36:42.059 they shelved in the 1980s or 1990s as too expensive 00:36:42.059 --> 00:36:44.559 or too niche, might Corning be currently poised 00:36:44.559 --> 00:36:47.219 to resurrect next to solve a critical 21st century 00:36:47.219 --> 00:36:49.900 energy or climate challenge? It's a company built 00:36:49.900 --> 00:36:52.400 on the profound idea that no research is ever 00:36:52.400 --> 00:36:54.940 truly wasted, and that is a powerful notion to 00:36:54.940 --> 00:36:56.360 consider for the future of innovation.