Corning building new factory in response to broadband internet boom
Corning said Tuesday it will build a new manufacturing facility outside Phoenix in response to a spike in demand for fiber-optic cable as the U.S. government ramps up a $42.5 billion internet funding program.
Why it matters: Building high-speed internet service to connect all Americans won't happen without the right equipment — and, thanks to the infrastructure funding law's "Buy America" provisions, it will need to be largely U.S.-made.
Driving the news: The fiber-optic cable factory will be built in Gilbert, Arizona. It's expected to open in 2024 and will add about 250 jobs.
- Corning said the investment is supported by customer commitments, including from "anchor customer" AT&T, which is also working with Corning on a fiber optic technician training program.
- AT&T also announced plans Tuesday to build a new fiber internet network in Mesa, Ariz., that will offer service to more than 100,000 homes in 2023. It's the company's first fiber network in the state.
What they're saying: Corning said the new facility brings investments in fiber and cable manufacturing to more than $500 million since 2020 and will help to double its capacity to serve the North American market.
- "The largest and lowest cost manufacturing facilities for fiber in the world are located in the U.S., in North Carolina — and both belong to Corning," Corning chairman and CEO Wendell Weeks told Axios.
Between the lines: Corning, the 170-year-old company best known for glass, is poised to get a big boost in broadband business. It's the largest U.S. manufacturer of fiber optic cable at a time when U.S. law requires providers to use domestic-made products to receive federal funding.
- "We're serious about trying to meet the expectations of government programs that will be used to ensure that the digital divide is addressed," AT&T CEO John Stankey told Axios. "We think this is a significant step that positions us in the right way."
The intrigue: Broadband industry trade groups have sought waivers from the Buy America rules, arguing "no combination of network products" will meet the requirements.
- "We all agree that we should aspire to a 'buy American' axiom," USTelecom Association president Jonathan Spalter told Axios. "In practical terms, in the broadband sector, the number of suppliers is highly limited."
The big picture: AT&T is focusing on a fiber-first strategy for its expansion plans, with a goal of reaching 30 million locations with fiber by 2025.
- The company's wireless competitors, Verizon and T-Mobile, are building out 5G home internet services in which customers use their 5G wireless connection for all their online needs.
- "Our belief is that while in the near term, fixed wireless might be able to play and meet some needs today, over the long haul we believe the only scale technology for most established businesses and homes is going to be fiber optics," Stankey told Axios.