- Corning inked a $6B supply agreement with Meta to make fiber for the tech giant’s data centers
- The vendor is also preparing to manufacture hollow core fiber for Microsoft
- Corning has already admitted to supply constraints, as it plans to expand manufacturing and increase jobs in North Carolina
Corning is about to get even busier with fiber manufacturing, as another hyperscaler deal landed on its doorstep.
The $6 billion multi-year agreement with Meta will see Corning supply fiber, cable and connectivity products designed to – no surprise – “meet the density and scale demands of advanced AI data centers,” said the press release.
To that end, Corning plans to beef up manufacturing capacity in North Carolina, which includes an expansion of its Hickory plant where Meta will serve as the “anchor customer.”
The additional capacity would boost Corning’s projected employment growth in North Carolina by 15-20%, Corning said, “sustaining a skilled workforce of more than 5,000 employees in the state.”
The company aims to increase jobs while fellow vendor CommScope pulled the plug on expanding in North Carolina after divesting most of its business to Amphenol.
Corning’s Meta deal comes as the company prepares to make hollow core fiber (HCF) for Microsoft – also in its North Carolina factories. Microsoft and most recently AWS have ramped HCF production, even though demand remains significantly higher than available supply.
As for Meta, Corning is part of the tech giant’s $600 billion initiative to invest in U.S. data centers and infrastructure by 2028. Both Meta’s Prometheus one-gigawatt site in Ohio and 5-gigawatt Hyperion campus in Louisiana will have Corning fiber cabling, Meta Chief Global Affairs Officer Joel Kaplan said in an interview with CNBC.
“We want to have a domestic supply chain that’s available to support that,” he said.
Corning is busy amid fiber supply shortage
With Meta and Microsoft, as well as an Apple glass-manufacturing deal and a supply agreement with Lumen, Corning’s got a lot on its plate amid an already-constrained supply chain.
Hyperscalers are clamoring for more fiber and Broadband Equity, Access and Deployment (BEAD) builds are also on the horizon, resulting in a shortage of not just cable but also fiber glass.
J.Golds Associates Principal Jack Gold noted Corning’s agreement with Meta isn’t the only reason it’s expanding “but it gives them a good ‘excuse’ to announce it.”
Suffice to say, the capacity upgrade won’t happen overnight. It’ll likely take Corning 1-3 years to build new facilities, he told Fierce.
“They say this is a multi-year agreement, but there is no timetable for deliveries, so this is likely to extend for at least several years,” Gold said.
Dell’Oro Group VP Jeff Heynen added the Meta deal sounds similar to the multi-year agreements Corning signed in the past with AT&T and Verizon, where those operators agreed to buy a certain amount of fiber and other products each year.
“For Corning and their customers, these longer-term deals help to de-risk the supply of fiber by allowing Corning to expand its manufacturing facilities,” he said.
But as Corning attempts to meet surging demand, “it really sounds like supply will remain tight until and even after the expanded facilities are up and running,” Heynen concluded.