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| So that certainly is favorable for us on the Environmental side |
| You've been very successful in kind of driving more Corning content across the end markets |
| We regulated operating expense and capital expense and all of that contributed to nice cash flow improvements as well as we went through the year |
| Foldable -- bendable, foldable, to the extent that becomes a standard in the industry, that's also very favorable and certainly would add revenue dollars for us |
| And so we think that's a great opportunity |
| I mean I think the way to think about the auto market for us is there are trends in the market that are very favorable for both our filters, ceramics filters, environmental business as well as the glass business |
| It's a nice business, generates a nice amount of income and cash flow, and we expect that to continue to grow with the industry |
| But to the best of my knowledge, I think we have relatively high confidence that some form of regulation will come into play in the next several years, which is favorable for our business |
| We're well positioned with the current panel makers |
| I think those trends I mentioned, as long as they remain the sort of industry trends, that actually is very favorable for us regardless of what vehicle type is being manufactured |
| So a section of the EV market is a plug-in hybrid or hybrid vehicles, and that's actually still very favorable for our Environmental business |
| We improved productivity |
| We participate in that market today and have done exceptionally well |
| And if that's in the greater than 25% range, 25% to 30% range, that's a good place for us to be |
| But I think that remains to be seen, right? How does bendable -- how big does foldable become? How big does AR become over what time period? And then maybe the only other point I would add is that in this segment, we have a business which we call Advanced Optics which makes specialty glass for other industries, for example, the semiconductor industry, we're actually seeing nice growth there |
| So as the semiconductor supply chain continues to grow, that's an opportunity for us to grow in this segment as well |
| We're continuing to see nice growth there |
| So that's really favorable |
| So it's a significant opportunity |
| And I think that will help us to continue to grow on the glass side in Specialty Materials segment |
| And as volume begins to come back, that should be accretive to our margins, and we have a leverage point on the gross margin level and a leverage point on the operating margin level because we expect to be able to operate with the level of cost we have today as we start to see our sales come back |
| I think those things would be compounders and allow us to grow at a faster rate to the extent that the adoption level was high |
| It's a good gauge |
| So we've been doing that by protecting ourselves against the yen, by having the lowest cost, by being the technology leader, and most recently in 2023 by raising price |
| As we exited the year, our gross margin was about 300 basis points higher than when we started the year in 2023 |
| We took advantage of the opportunity to produce what we would call clean polysilicon and reenter that market |
| And then the other two trends that are helping us on the glass side are connectivity of the car or how the consumer interacts with the vehicle, and that's adding a number of displays or a large-size displays into the vehicle, and we've had a number of wins there on the glass side, on the interior side and then as well as autonomy, which requires sensors or cameras or other technology where specialized glass is really important, even if you think about your windshield acting like a camera lens, so to speak |
| I mean we remain the market leader in this space, and we certainly would potentially be willing to trade share for the right level of profitability, but so far, so good |
| So during 2023, it was really important for us to improve profitability and cash flow |
| We also -- as I mentioned earlier, there are certainly some subsegments of various different industries that should grow faster than the average |
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| Panel makers took utilization down in the fourth quarter |
| We clearly have depressed demand, and we have the capacity to supply significantly more than we're currently supplying |
| Yes, as you mentioned, we're definitely seeing a depressed demand across most of our markets |
| We've described it as the markets and our businesses being below their long-term trend lines |
| Retail demand was a little weaker |
| And if you think about us having raised price over time, cost goes up, price goes up, your gross margin percent actually goes down |
| So if we think about where they're running today, they could not meet demand for the year |
| In Display, panel maker utilization, we look at the rate of utilization of panel makers and that level is depressed -- was depressed in the fourth quarter |
| Now that said, I will be cautious, and I would caution everybody that people don't always do what they say they're going to do or it just may take time for that to happen |
| Given the weak demand, you guys have taken a number of kind of initiatives on the cost structure |
| If you go back to 2016, the number of units of smartphones is down about 20% |
| But we'll be cautious or cautiously optimistic about how it impacts us |
| But you're not seeing, obviously, in the past, there's been concerns about that would bring less overall glass content |
| Some recent commentary from the industry suggest that the panel makers might not see as big of a decline in Q1 as you originally thought |
| We had entered the year at a lower point, some of the drags from the pandemic-related supply chain impacts |
| Moving on to Display, in your 2024 outlook, you mentioned expectations for the panel maker utilization declines in Q1 |
| And as we've stated, we are about 30% below that trend line, which actually is about a 40% increase from our current level of sales when we get back to that trend line |
| But in some cases, we have higher fixed cost in some of our businesses |
| I think this is great example for us of what we call more Corning, where the devices, the number of devices has actually declined significantly |
| They are running that utilization lower in the first quarter |
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