Corning issued disappointing third-quarter sales guidance, as growth is being squeezed by production limits on its booming AI connectivity products and broader drags in consumer electronics.
While demand for next-generation data centers remains hot, executives signaled that output is capped by current manufacturing limits as it rushes to build out new capacity
Corning makes the ultradense optical fibers used to connect the thousands of specialized chips inside AI data centers. But combined with weakness in consumer mobile devices, the supply constraints are tempering revenue, even as orders keep coming in. Most Read from The Wall Street Journal “We continue to have the enviable situation of if we could make more, we could sell more,” Chief Executive Wendell Weeks told analysts on a call, noting that the company is targeting capital expenditures of $2 billion this year to expand production and meet growing demand.
Corning expects core sales for the current quarter to increase by about 16%, to between $4.9 billion and $5 billion. Analysts expect $5 billion for the quarter. Shares fell by 20% at $114.95 on Tuesday, on pace for the largest percent decrease since July 31, 2002, when it fell 35%.