Samsung and Corning just made some interesting adjustments to their current 40-year partnership. Samsung and Corning already have a joint venture called Samsung Corning Materials. Ltd. Samsung owned a 43% stake in the company, but they will receive $1.9 billion in convertible preferred Corning shares as well as invest $400 million in new convertible preferred shares. I know it’s confusing, but the end result is that Samsung will have a 7.4% stake in the company on an as-converted basis.
What’s even more important is that Samsung and Corning signed a new long-term supply agreement that lasts until 2023. This is obviously a smart move for Samsung in that they won’t have to worry about other manufacturers jumping ahead of them. It doesn’t mean other manufacturers won’t use Gorilla Glass, it just means they won’t get preferred treatment. For Corning, it’s a win because they will gain more flexibility in serving customers, managing capacity, and minimizing capital spending as they expand production of Gorilla Glass and develop new specialty glass applications.
Full presser after the break.