Corning Delivers Annual Briefing on Fiber and Photonics Markets in Conjunction with OFC 2002.

Business Editors/High-Tech Writers

Optical Fiber Communications 2002

ANAHEIM, Calif.--(BUSINESS WIRE)--March 19, 2002

Corning Incorporated(NYSE:GLW):

Company remains confident in long-term growth potential

of optical communications industry and

Corning's optical layer leadership

Corning Incorporated (NYSE:GLW), a world-leading supplier of optical communications products, today expressed optimism tempered with realism as it presented its annual overview of the fiber and photonics industry.

Following a year of unprecedented industry downturn, and in the face of near-term visibility constraints, Corning reiterated confidence in its optical layer strategy and the long-term growth potential of the optical communications industry. Corning's comments were delivered at an analyst and media briefing today held in conjunction with the annual Optical Fiber Communications Conference (OFC 2002) in Anaheim, Calif.

Corning estimated that in 2001, worldwide demand for optical fiber declined by approximately 5% and worldwide revenue for terrestrial optical transport equipment decreased by approximately 25% from the previous year. The company noted that it believed the optical fiber market was bottoming out, with modest sequential volume growth expected in quarter one 2002. However, the company said limited visibility makes it difficult to predict growth rates in subsequent quarters.

With the fundamental drivers of bandwidth growth and the push toward optical transparency intact, Corning emphasized that when recovery does occur, it is expected to be led by: optical fiber build-outs in metro edge and access markets; continued international fiber adoption; and the lighting of previously installed long-haul and metro core fibers that will require additional photonic modules.

2001: "A Year of Two Halves for Optical Fiber"

Citing the extremes of strong growth in the first half of 2001 and steep declines in the second half, particularly in North America, Alan T. Eusden, senior vice president and general manager of Corning Optical Fiber, estimated that the total worldwide fiber market was approximately 110 million fiber kilometers last year, representing an overall decline of approximately 5% compared to 2000. Eusden said that this is the first time in history that the worldwide fiber market has shown a decline.

Eusden detailed the 2001 demand by region and application. He cited the following estimates: North America, which accounted for 35% of the total worldwide demand, declined by approximately 30%; Western Europe, representing 25% of the worldwide demand, declined by approximately 10%; Japan, representing 15% of the worldwide demand, increased by nearly 90%; "Other Asia," which represented 20% of the worldwide demand, increased by about 40%; Latin America and "Rest of World," which comprised 5% of the worldwide demand, declined by approximately 5%.

Eusden continued by breaking out the 2001 growth rates by application: long-haul terrestrial/submarine, metro, access, and premises. Long-haul terrestrial/submarine, accounting for 20% of the total worldwide demand, showed a decline of approximately 40%, driven largely by the steep decline in capital expenditures and economic turbulence in the U.S. and Western Europe; demand for fiber in metro applications, representing 40% of the total worldwide demand, grew by approximately 20%; access, representing 35% of the total worldwide demand, showed an increase of about 10%; and premises, accounting for 5% of the total worldwide demand, stayed flat.

Photonics Market Recap

Dr. Gerald J. Fine, executive vice president and general manager of Corning Photonic Technologies, presented Corning's review of the worldwide market for photonic components and modules. Fine estimated that, after nearly 50% growth in 2000, optical transport spending, which includes DWDM, SONET/SDH, and optical switching equipment, declined by approximately 25% in 2001. Factored into this, Fine noted, was an increase of approximately 25% in optical transport spending in the Asia Pacific region and a decrease of over 45% in optical transport spending in North America.

Fine went on to provide Corning's 2001 estimates of segment growth or decline within the optical transport market. He noted that terrestrial DWDM systems sales declined by nearly 30% in 2001. Key points relative to this downturn included: North America declined by over 50%; Asia-Pacific nearly doubled in revenues; Long-haul declined by over 35%; Metro grew by approximately 65%. Additionally, Fine noted that the total DWDM components market declined by 40% in 2001.

While the pace of near-term recovery in the industry is still unclear, it was noted that the recovery will be driven by bandwidth growth rates expected to be in the 60%-80% range annually. Dr. Mark A. Newhouse, vice president and general manager, Optical Networking Devices, outlined the potential of agile transparent systems to meet that demand at significantly lower costs than the currently deployed opaque systems. He then outlined the Corning products that are enabling these more cost-effective, agile transparent systems that increase optical transparency and deliver lowest component costs.

Reaffirming the company's commitment to its optical layer strategy, Corning officials highlighted key current and future technologies, product introductions and enhancements, and collaborative efforts with other industry leaders that the company is showcasing in its booth (#3021) at OFC this year.

Conference Call Information

Corning will make the presentations available to the public by webcast and telephone access. The broadcast will be held today at 8:30 a.m. PT. The dial in number is 773-756-4705. The password is Briefing. The leader is Dietz. A replay of the call will begin at approximately 5:00 p.m. PT and will run through 5:00 p.m. PT on Tuesday, April 2, 2002. To access the replay, dial 402-280-1618; a password is not required. A live audio webcast will be available at www.corning.com/investor_relations/ and will remain there for 14 days following the call

Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television, information technology and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning's revenues in 2001 were $6.3 billion.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. These risks and uncertainties include the possibility of changes or fluctuations in global economic conditions; currency exchange rates; product demand and industry capacity; competitive products and pricing; availability and costs of critical components and materials; new product development and commercialization; order activity and demand from major customers; capital spending by larger customers in the telecommunications industry and other business segments; the mix of sales between premium and non-premium products; possible disruption in commercial activities due to terrorist activity and armed conflict; ability to obtain financing and capital on commercially reasonable terms; acquisition and divestiture activities; the level of excess or obsolete inventory; the ability to enforce patents; product and components performance issues; and litigation. These and other risk factors are identified in Corning's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.