Corning Buys NetOptix, Teams With Samsung for Components Packaging

Corning Incorporatedo strengthen its optoelectronic portfolio, <%=company%> signed a definitive agreement to buy NetOptix. Once known almost exclusively for optical fiber and bulk optical materials, Corning has been diversifying into photonic components over the past three years, starting a photonic technology division and acquiring component suppliers such as Optical Corporation of America (Marlborough, MA; see Newport Buys Commercial Optics Segment of Corning OCA; Corning Retains Telecom Business,) and Lasertron (see Corning Adds Lasertron's Optoelectronics Capabilities by Buying Oak Industries).

Under the terms of the agreement, NetOptix will exchange each share of its common stock for 0.9 share of Corning common stock; based on Corning's closing price of $165.75 per share on February 11, 2000, the transaction is valued at approximately $2 billion. NetOptix will become a wholly-owned subsidiary of Corning upon completion. Subject to the usual regulatory and shareholder approvals, the transaction is expected to close in the second quarter of this year.

NetOptix includes subsidiaries Optical Filter Corp. and OFC GmbH, which produce optical filters for DWDM applications in fiberoptic networks. OFC has an optical filter manufacturing location in Natick, MA and a diamond turning facility in Keene, NH. OFC GmbH is completing a facility in Hanau, Germany for optical filter technology research and development as well as commercial production of DWDM filters.

Joint venture with Samsung
In related news, Corning has joined forces with Korea-based Samsung Electronics to form a new equity-venture company to mass-produce micro-optic products used to expand the capacity of the Internet.

The new company, Samsung Corning Micro-Optics, will manufacture dense wavelength division multiplexing (DWDM) packaged components using robotics and other automation developed by Samsung in key manufacturing steps currently done manually. As a result, the company expects benefits in capacity, reproducibility, unit cost and reduced cycle time. Terms of the agreement were not disclosed.

Samsung Corning Micro-Optics will be located in an existing Samsung facility near Seoul in Suwon, South Korea. With its component packaging capability the company will substantially expand Corning's DWDM business and will serve as a new source of low-cost components to its erbium-doped fiber amplifier (EDFA) module business. Volume manufacturing will be underway by mid-2000.

The packaging capacity added by the new venture will be facilitated by thin film filters supplied from Corning's operation in Marlborough, MA; recently announced plans call for ramping up manufacturing capacity ten-fold by year end (see Corning Increasing Production of Thin Film Filters Used In Optical Networks). Corning also expects to supply its new venture with thin film filters produced by the OFC subsidiary of NetOptix.

Edited by Kristin Lewotsky