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Asahi Glass Plans to Ride Smartphone, Tablet Wave

By JURO OSAWA
TOKYO—Asahi Glass Co. aims to grab a 30% share of the market for cover glass used in smartphones, tablet computers and other electronic devices, saying the consumer segment will likely become a "pillar of growth."

The Japanese company Thursday unveiled its Dragontrail brand of glass, which glass maker says is six times stronger than conventional soda-lime glass used in windows and bottles. Asahi said it expects to generate at least 30 billion yen ($365.6 million) in sales in 2012 from its durable Dragontrail glass.

Cover glass—used as the outermost layer in screens for electronic devices—protects the more-delicate components like touch screens and liquid-crystal-display panels.

Dragontrail glass "is a special type of glass that meets the needs of smartphones and other new electronic devices," said Asahi Glass Chief Executive Kazuhiko Ishimura at a news conference.

Barclays Capital projects global shipments of smartphones in 2012 to reach 500 million units, nearly double last year's 274 million, and forecasts tablet shipments to surge to 57 million units in 2012, more than triple last year's 16 million.

Asahi is likely to meet fierce competition. Corning Inc. of the U.S., the world's largest LCD glass maker, is aggressively seeking a broader client base for its Gorilla brand of scratch-resistant glass already used as cover sheets in various mobile devices, including Samsung Electronics Co.'s Galaxy Tab tablet.

A spokesman for Nippon Electric Glass Co., Asahi's Japanese rival, said the company is developing a new type of glass that can compete with both Corning and Asahi.

"The Dragontrail will be able to match any other product in the market," said Nozomu Taguchi, senior executive officer in Asahi's electronics glass general division. At a news conference, the company showed video clips it made to test Dragontrail's strength by hitting the glass with a hammer.

The company said that the Dragontrail is already used in some mobile gadgets, though it declined to say which ones.

Asahi's sales target of 30 billion yen for next year is modest compared with the company's revenue forecast of 1.280 trillion yen for 2010, said SMBC Friend Research Center analyst Naoki Yokota. Still, given the rapid growth of smartphone and tablet markets, "this segment could become one of the main revenue drivers for Asahi Glass in a few years," he said.