康寧 (GLW) 2012 Q3 法說會逐字稿

Welcome to the Corning Incorporated quarter-three 2012 results conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session; instructions will be given at that time.

歡迎參加康寧公司（Corning Incorporated）2012 年第三季財報電話會議。目前所有與會者皆為僅收聽模式。稍後我們將進行問答環節；屆時將提供相關指示。

(Operator Instructions)

（接線員指示）

As reminder, this conference is being recorded. I would now like to turn the conference over to your host, Director of Investor Relations Ann Nicholson. Please go ahead.

提醒各位，本次會議將被錄音。現在我想把會議交給您的主持人——投資人關係總監 Ann Nicholson。請開始。

Thank you, Greg, and good morning. Welcome to Corning's third-quarter conference call. Jim Flaws, Vice Chairman and Chief Financial Officer, will start the call with some prepared remarks. Wendell Weeks, Chairman and Chief Executive Officer, will join us for the Q&A.

謝謝你，Greg，大家早安。歡迎參加康寧第三季電話會議。副董事長兼財務長 Jim Flaws 將以事先準備的談話開場。董事長兼執行長 Wendell Weeks 將加入我們的問答環節。

Before Jim begins, I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These remarks involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially. These factors are detailed in the Company's SEC reports.

在 Jim 開始之前，我想提醒各位，今天的發言包含前瞻性陳述，屬於 1995 年《私人證券訴訟改革法》（Private Securities Litigation Reform Act of 1995）所界定之範圍。這些發言涉及多項風險、不確定性及其他因素，可能導致實際結果出現重大差異。相關因素已詳載於本公司向 SEC 提交的報告中。

Now I'd like to turn the call over to Jim.

現在我想把電話會議交給 Jim。

Thanks, Ann. Good morning, everyone. As we enter the fourth quarter, I would like to step back a little to reflect on the past 12 months for Corning before I cover the Q3 details and the Q4 outlook. Corning's identity and strategy have been in place for a number of years, and remain unchanged. We are the world leader in specialty glass and ceramics. We grow primarily through internal innovation led by our R&D and material science and process engineering. This focus allows us to innovate and create keystone components that establish market-leading positions in a variety of industries.

謝謝，Ann。各位早安。在我們進入第四季之際，在我說明第三季細節與第四季展望之前，我想先稍微退一步，回顧康寧過去 12 個月的情況。康寧的定位與策略已建立多年，且維持不變。我們是全球特種玻璃與陶瓷的領導者。我們主要透過內部創新來成長，由研發、材料科學與製程工程所帶動。這樣的聚焦使我們能夠創新並打造關鍵核心元件，進而在多個產業建立市場領先地位。

Now, we pursue this vision by adhering to a strategic framework which guides our decisions and helps us navigate good times and their opportunities, as well as the potential volatility of our industries in the macro environment. We emphasize different parts of this strategic framework in response to changes in our environment. The best current example of the framework helping us is our ability to push forward on innovation, and develop new businesses like Gorilla, and to also fund shareholder-positive actions despite a weak macro environment and turmoil in the LCD and photovoltaic industries.

我們透過遵循一套策略框架來追求此願景；該框架引導我們的決策，並協助我們在景氣良好時把握機會，同時也能因應總體環境下各產業可能出現的波動。我們會因應環境變化而強調此策略框架中的不同面向。目前最好的例子，是該框架協助我們在總體環境疲弱、LCD 與太陽能光伏產業動盪之際，仍能推進創新、發展如 Gorilla 等新事業，同時也能資助對股東有利的行動。

Now, one year ago when we entered the fourth quarter of 2011, we were experiencing significant changes. On the positive side, our financial health and declining need for capital expenditures led the Board to act to return more money to shareholders with a 50% increase in the dividend and starting a $1.5 billion share repurchase. We were also experiencing positive momentum in our Telecom, Environmental, Specialty Materials segments led by increasing sales and improving margins. However, on the negative side, we had experienced a significant share loss at a large LCD customer in Korea, and also were entering into what turned out to be a two-quarter period of significant price declines for LCD glass. And at Dow Corning, our equity venture, we began to experience a collapse in the pricing of polysilicon for the solar market.

一年前，當我們進入 2011 年第四季時，正經歷顯著變化。正面而言，我們的財務體質良好且資本支出需求下降，促使董事會採取行動，透過將股利提高 50% 並啟動 15 億美元庫藏股回購計畫，把更多資金回饋股東。我們在電信、環境與特種材料事業部也出現正向動能，銷售成長並帶動毛利率改善。然而，負面而言，我們在韓國一位大型 LCD 客戶處出現顯著市占流失，並且也進入了後來證明為期兩季的 LCD 玻璃大幅降價期間。此外，在我們的權益法投資合資企業 Dow Corning，我們開始經歷太陽能市場用多晶矽價格的崩跌。

These events led us to announce to investors at the beginning of 2012, the Company would experience a reset to a lower level of profitability. We laid out a plan for 2012 of forming bonds, primarily by stabilizing display performance and returning positive momentum to this segment. And also by marching up, improving our earnings by growing sales and improving margins in our other segments. We felt, and continue to feel, this plan will result in a return to earnings growth for Corning.

這些事件使我們在 2012 年初向投資人宣布，公司將重設至較低的獲利水準。我們提出 2012 年計畫，主要是透過穩定顯示事業表現並讓該事業部重回正向動能，以建立基礎。同時也要循序推進，透過其他事業部的銷售成長與毛利率改善來提升獲利。我們當時認為、且現在仍認為，這項計畫將使康寧重回獲利成長。

Now I'd like to give you a brief summary of our progress against this plan before I turn to the Q3 results. I'm pleased to say we made good progress against these goals, especially in light of the current global economy. We've held LCD glass pricing to moderate declines in Q2 and Q3, and we now have new agreements with key customers that we believe will stabilize our share, all the while diligently managing our LCD glass capacity to the level of demand. I will discuss the new agreements in more detail later.

在我轉到第三季結果之前，我想先簡要總結我們在此計畫上的進展。我很高興地表示，特別是在目前全球經濟情勢下，我們在這些目標上取得了良好進展。我們在第二季與第三季將 LCD 玻璃價格跌幅控制在溫和水準；目前也已與關鍵客戶達成新協議，我們相信這將穩定我們的市占，同時我們也持續審慎管理 LCD 玻璃產能，使其符合需求水準。稍後我會更詳細說明這些新協議。

We've also had some positive revenue and earnings momentum in our other segments. So, while Telecom will likely not meet our internal growth goals for the year, it remains well-positioned in key growth markets when the economy picks up. As of Q3 year to date, Specialty Materials sales are up 13%, and even more in gross margins. And with the pending close of Discovery Labware acquisition in Life Sciences, it will become nearly a $1 billion business.

我們在其他事業部也出現一些正向的營收與獲利動能。因此，雖然電信事業今年可能無法達成我們內部的成長目標，但在景氣回升時，它在關鍵成長市場仍具備良好布局。截至第三季年初至今，特種材料銷售成長 13%，毛利率的成長幅度更高。而隨著生命科學事業中 Discovery Labware 收購案即將完成交割，該事業將成為接近 10 億美元規模的業務。

Our Environmental business is feeling the effects of slowdowns in the auto business in Europe, and now the Class A truck industry. But I would like to remind you that earlier this year, we secured long-term agreements with key diesel customers, positioning us for future growth driven by diesel engine regulations. And we have several innovation programs with the potential for explosive growth. So, we continue to feel good about the growth prospects of the non-LCD businesses, our innovation portfolio, and the expected free cash generation of Display in the Company as a whole. These strengths, coupled with our continuing financial strength, led the Board to increase the dividend by 20% earlier this month.

我們的環境事業正感受到歐洲汽車產業放緩，以及目前 Class A 卡車產業放緩的影響。但我想提醒各位，今年稍早我們已與關鍵柴油客戶簽訂長期協議，使我們能在柴油引擎法規帶動下，為未來成長做好定位。此外，我們有數個創新計畫具備爆發式成長的潛力。因此，我們仍對非 LCD 事業的成長前景、我們的創新組合，以及顯示事業與公司整體預期的自由現金流產生能力感到樂觀。這些優勢，加上我們持續的財務實力，促使董事會在本月稍早將股利提高 20%。

Now, we've also expressed some worries about the economy on both our Q1 and Q2 calls, and unfortunately some of these are now coming true. We are now at the point where the macro economy is weakening, affecting sales across most of our businesses with several not achieving the growth we had laid out at the beginning of the year. We believe this weakness will continue into next year. Therefore, as part of our plan to grow earnings, must be to contain costs. We are currently thinking through several cost-cutting measures including slowing project spending, trimming fixed costs through restructuring, which will likely include headcount reductions, and slowing capital spending. We have not made a final decision yet, but we anticipate taking a pre-tax charge of up to $50 million in the fourth quarter.

我們在第一季與第二季電話會議上也表達過對經濟的擔憂，不幸的是，其中一些情況如今正在發生。我們目前已到達總體經濟轉弱的階段，影響我們多數業務的銷售，使其中數項未能達成我們年初所提出的成長目標。我們認為這種疲弱將延續到明年。因此，作為我們獲利成長計畫的一部分，必須控制成本。我們目前正在評估多項削減成本措施，包括放緩專案支出、透過重整來削減固定成本（可能包含人力縮減），以及放緩資本支出。我們尚未做出最終決定，但預期在第四季認列最高達 5,000 萬美元的稅前費用。

Now I'll turn to the third-quarter details. I'm pleased to announce our results. Both sales and earnings per share were above consensus for the quarter. Third-quarter sales were $2.04 billion, up 7% versus Q2, and down 2% from a year ago. Having sales above consensus has been a feat this quarter, and I'm very pleased that we did it. Gross margin was 43%, up about 1 percentage point, as expected. Higher volumes in Display and Gorilla Glass drove the improvement.

現在我將轉到第三季的細節。我很高興宣布我們的業績表現。本季營收與每股盈餘皆高於市場共識預期。第三季營收為 20.4 億美元，較第二季成長 7%，較去年同期下降 2%。本季營收能高於共識預期是一項成就，我對此非常高興。毛利率為 43%，如預期上升約 1 個百分點。顯示事業與 Gorilla Glass 的出貨量增加帶動了改善。

SG&A and R&D were flat on a dollar basis. Versus a year ago, SG&A was up as a percentage of sales due to the non-repeat of two events that occurred in quarter three of 2011. We had credits then resulting from a reduction in contingent liability associated with an acquisition in Telecom, and we also had reversed an accrual for performance-based compensation. Equity earnings were $230 million excluding specials, and were down about 11% sequentially and in line with expectations. EPS excluding special items were $0.34, that's 10% higher than Q2, but obviously a material decline from a year ago. EPS as stated here is a non-GAAP measure, and a reconciliation to GAAP can be found on our website.

SG&A 與 R&D 以金額計持平。相較去年，SG&A 佔營收比率上升，原因是 2011 年第三季發生的兩項一次性事件未再重現。當時我們因電信事業一項收購案相關的或有負債減少而取得抵減（credits），同時也回轉了以績效為基礎的薪酬準備。排除特殊項目後的權益法收益為 2.30 億美元，較前一季約下降 11%，並符合預期。排除特殊項目後的 EPS 為 0.34 美元，較第二季高 10%，但顯然較去年同期大幅下滑。此處所述 EPS 為非 GAAP 指標；與 GAAP 的調節表可於我們的網站查閱。

Now I will turn to our Q3 segment results, and I'll start with Display. Display sales were $763 million in Q3, an increase of 19% sequentially and down 6% versus last year. The [n] exchange rate was not a factor comparing Q2 and Q3. Equity earnings from our joint venture in Korea, SCP, were $187 million in Q3, an increase of 2% versus the second quarter. For your modeling purposes, SCP's third-quarter LCD sales were about $745 million, an increase of 1% from the second quarter. As a reminder, this represents SCP's LCD sales only. Our public filings report SCP's total sales, which include CRT glass and other products.

現在我將轉到我們第三季（Q3）各事業部門的業績，先從顯示器（Display）開始。顯示器事業第三季銷售額為7.63億美元，較前一季成長19%，較去年同期下降6%。在比較第二季與第三季時，[n] 匯率並非影響因素。我們在韓國的合資企業SCP於第三季的權益法收益為1.87億美元，較第二季增加2%。供您建模之用，SCP第三季LCD銷售額約為7.45億美元，較第二季增加1%。提醒一下，這僅代表SCP的LCD銷售額。我們的公開申報文件揭露的是SCP的總銷售額，其中包含CRT玻璃及其他產品。

As we expected, LCD glass price declines in Display were moderate in Q3 at both our wholly-owned business and SCP. LCD glass volumes also met expectations. Our wholly-owned business volumes were up about 20% sequentially, driven by customer utilization increases. Volumes at SCP were up in the mid-single digits sequentially, in line with their customer utilization rates. The combination of moderate price declines, high capacity utilization from the higher volumes, solid manufacturing execution, led to an increase in gross margin in net income sequentially.

如我們所預期，顯示器事業在第三季的LCD玻璃價格下滑幅度溫和，無論在我們的全資業務或SCP皆然。LCD玻璃出貨量也符合預期。我們的全資業務出貨量較前一季增加約20%，主要受客戶產能利用率提升所帶動。SCP的出貨量較前一季增加中個位數百分比，與其客戶產能利用率一致。溫和的價格下滑、高出貨量帶來的高產能利用率，以及穩健的製造執行，共同推動毛利率與淨利較前一季提升。

On the supply-chain front, we have come through Q3 inventories about 15.5 weeks on a forward-looking basis. Because Q4 is seasonally larger, these weeks of supply are actually misleading. We believe the supply chain built a little over 350 million square feet of inventory through the first three quarters in preparation for this seasonally strong Q4. I will comment more on the outlook and risk in supply chain in my outlook session.

在供應鏈方面，我們第三季結束時的庫存約為15.5週（以前瞻基礎計算）。由於第四季（Q4）季節性規模較大，這個供應週數其實具有誤導性。我們認為供應鏈在前三季為了準備季節性強勁的第四季，累積了略高於3.5億平方英尺的庫存。我會在展望部分進一步說明供應鏈的前景與風險。

As final retail data for Q2 has come in, and Q3 begins to come in, we are now lowering our view of retail glass demand to be approximately 3.5 billion square feet. The reduction is from the continuing sluggish worldwide demand for monitors -- we now believe monitor demand will decline year over year versus our previous view of flat -- and the reduced demand for television units. TV units are tracking to about 208 million units into retail, a slight year-over-year increase. The good news in the television market is that large-size televisions continue to sell well, driving the average screen size higher. If we compare our forecasted TV units at the beginning of this year and now, the increase in size has made up for 60% of the unit shortfall as measured in area.

隨著第二季最終零售數據出爐、第三季數據也開始進來，我們現在將零售端玻璃需求的看法下修至約35億平方英尺。下修原因在於全球顯示器需求持續疲弱——我們現在認為顯示器需求將較去年同期下滑，而先前的看法為持平——以及電視整機需求降低。電視整機零售出貨量目前追蹤約為2.08億台，較去年同期小幅增加。電視市場的好消息是，大尺寸電視持續熱賣，帶動平均螢幕尺寸上升。若比較我們年初對電視整機的預測與目前的預測，尺寸增加以面積衡量已彌補了整機缺口的60%。

As I said in July, we believe the China region is our biggest risk. China has been tracking below our forecast overall in the first half. However, the new stimulus program implemented in August seems to be driving demand. Preliminary August units were up 14%, and early indicators on their Golden Week holiday sales appear in line with our expectations. We'll have some additional data on retail and our 2012 expectations in the appendix section of our slides, and you'll find them posted on our Investor Relations website later.

如我在7月所說，我們認為中國地區是我們最大的風險。上半年中國整體表現低於我們的預測。不過，8月推出的新刺激方案似乎正在帶動需求。8月初步整機出貨量年增14%，而黃金週假期銷售的早期指標看起來也符合我們的預期。我們會在投影片附錄部分提供更多零售數據與我們對2012年的預期，稍後也會張貼在我們的投資人關係網站上。

Telecom sales were $523 million, down 6% sequentially, and lower than our expectations. The sequential decline in miss versus expectations was largely driven by lower sales in North America and Europe, offsetting growth in China. Europe's miss is mostly due to the softer economy; North America was down due to project delays and a second-half decline in stimulus spending on optical cable in support of infrastructure projects. Compared to last year, Q3 Telecom sales were down almost 7%, with strength in China offset by the lower sales across most product lines in North America and Europe.

電信（Telecom）事業銷售額為5.23億美元，較前一季下降6%，且低於我們的預期。相較預期的落差主要來自北美與歐洲銷售較低，抵銷了中國的成長。歐洲未達預期主要因經濟走弱；北美則因專案延遲，以及下半年用於支援基礎建設專案之光纜刺激支出下滑而下降。與去年同期相比，第三季電信銷售額下降近7%；中國的強勁表現抵銷了北美與歐洲多數產品線的銷售下滑。

Net income for the quarter was consistent with Q2. Compared to Q2 of 2012, the impact of 6% lower sales was offset by improvement in manufacturing performance and a reduction in operating expense spending. However, net income was down year over year by 57% or $47 million due to the non-repeat of the contingent liability reversal from M&A of $22 million in Q3 of 2011. In addition, the compensation adjustment I already mentioned.

本季淨利與第二季一致。與2012年第二季相比，銷售額下降6%的影響，被製造績效改善與營業費用支出降低所抵銷。然而，淨利較去年同期下降57%（或4,700萬美元），原因在於2011年第三季併購（M&A）所產生的2,200萬美元或有負債回轉利益未再重現。此外，還包括我先前提到的薪酬調整。

Environmental sales were $233 million, down 6% sequentially versus our expectation of flat to up slightly. While we did see some sales increase in light-duty diesel after Summer shutdowns, our orders for heavy-duty truck products declined substantially as our customers reacted to their negative net orders over the past six months, and also began to manage inventory in lieu of slowing sales. Q3 sales were down year over year due to lower sales in light-duty diesel. Net income was down sequentially, in line with the lower volume in heavy-duty diesel. Year-over-year net income was consistent on the lower sales due to the improving heavy-duty diesel gross margin.

環境（Environmental）事業銷售額為2.33億美元，較前一季下降6%，而我們原先預期為持平至小幅成長。雖然在夏季停工後，我們確實看到輕型柴油（light-duty diesel）銷售有所回升，但由於客戶對過去六個月的淨訂單為負作出反應，且在銷售放緩下開始以管理庫存取代拉貨，我們的重型卡車產品訂單大幅下滑。第三季銷售額較去年同期下降，原因為輕型柴油銷售較低。淨利較前一季下降，與重型柴油出貨量較低一致。由於重型柴油毛利率改善，儘管銷售較低，淨利在年對年比較上仍大致一致。

We had another very good quarter in Specialty Materials with sales up 23% sequentially, and higher than our expectations. Gorilla Glass sales hit a new quarterly record. Net income was up 74% sequentially, 55% year over year, driven by the continued improvement in Gorilla gross margin. I'm delighted to say there are now more than 1 billion devices worldwide containing Gorilla Glass. It continues to be the cover glass of choice, with more than 33 brands as our customers. We believe the increased Q3 volume beyond our expectations was driven by new device introductions in IT and handheld.

特種材料（Specialty Materials）本季再度表現非常出色，銷售額較前一季成長23%，且高於我們的預期。Gorilla Glass銷售額創下新的單季紀錄。淨利較前一季成長74%，較去年同期成長55%，主要受Gorilla毛利率持續改善所帶動。我很高興地表示，全球目前已有超過10億台裝置採用Gorilla Glass。它仍是首選的覆蓋玻璃（cover glass），我們的客戶品牌已超過33個。我們認為第三季出貨量高於預期，主要由IT與手持裝置的新機導入所帶動。

In Life Sciences, Q3 sales were down sequentially, and worse than our expectations of flat to up slightly, but they were consistent year over year. The lower sequential sales were due to softening economy impacting end-market demand, and also distributer inventory carrying levels. Net income was $9 million down from Q2 on lower sales and higher M&A expenses, and also down versus a year ago due to these M&A expenses and foreign exchange rates.

在生命科學（Life Sciences）方面，第三季銷售額較前一季下降，且比我們原先預期的持平至小幅成長更差，但與去年同期一致。銷售額季減主要因經濟走弱影響終端市場需求，以及經銷商庫存持有水位。淨利為900萬美元，較第二季因銷售較低與較高的併購（M&A）費用而下降；與去年同期相比也因這些併購費用與外匯匯率而下降。

We are working with the government to get antitrust approval for the BD acquisition. We expect we will get this approval very soon. More importantly, we remain excited by this transaction. After we close the deal, we will provide more details on our plans.

我們正與政府合作，以取得BD收購案的反托拉斯核准。我們預期將很快取得該核准。更重要的是，我們對這筆交易仍然感到振奮。在交易完成後，我們將提供更多關於我們計畫的細節。

Moving to Dow Corning, equity earnings were down 38% ex-specials in Q3, mainly due to the lack of two nonrecurring gains from Q2, and also a higher effective tax rate in the United Kingdom based on tax law change. Sales of polysilicon were down on exports of solar to China. Our speculation is this is due to the trade disputes. Versus a year ago, silicone sales are up slightly, but polysilicon sales are much lower driven by dramatically lower pricing due to the continued softness in the solar market. This is reflected in the year-over-year equity earnings decline of 57% ex-specials.

接著談Dow Corning：第三季權益法收益（排除特殊項目）較前一季下降38%，主要因第二季的兩項一次性收益未再出現，以及英國因稅法變更導致有效稅率提高。多晶矽（polysilicon）銷售因太陽能產品出口至中國而下滑。我們推測這與貿易爭端有關。與去年同期相比，矽酮（silicone）銷售小幅增加，但多晶矽銷售大幅降低，主因太陽能市場持續疲弱導致價格大幅下跌。這反映在年對年權益法收益（排除特殊項目）下降57%。

Now, in Q3, Dow Corning also recorded a $20 million NPAT credit for contract settlement. Corning chose to not reflect our share of this gain in our non-GAAP earnings for the quarter. Dow Corning did resume paying dividends in Q3; Corning received $50 million in dividends in Q3 from Dow Corning.

另外，Dow Corning在第三季也因合約和解認列2,000萬美元的NPAT貸項（credit）。Corning選擇不在本季的非GAAP盈餘中反映我們分攤的這部分收益。Dow Corning於第三季恢復發放股利；Corning在第三季自Dow Corning收到5,000萬美元股利。

Moving to the balance sheet, we ended the third quarter with $6.4 billion in cash and short-term investments. Capital spending was $422 million. Free cash flow for the quarter was a positive $214 million. As a reminder, free cash flow is a non-GAAP measure, and a reconciliation to GAAP can be found on our website. We also continued our share repurchase program during the third quarter. We repurchased $187 million shares in the quarter, leaving us with about $125 million left on the authorization entering Q4.

轉到資產負債表，我們在第三季末持有 64 億美元的現金及短期投資。資本支出為 4.22 億美元。本季自由現金流為正 2.14 億美元。提醒一下，自由現金流為非 GAAP 指標，與 GAAP 的調節表可在我們網站上查閱。我們在第三季也持續進行股票回購計畫。本季我們回購了 1.87 億美元的股票，使得在進入第四季時，授權額度尚餘約 1.25 億美元。

We enter the quarter with approximately $2.36 billion of cash in the United States. As I mentioned in the Life Sciences section, we have not received FTC approval for the BD transaction yet. BD transaction will be primarily a US cash acquisition. If the transaction closes this year as we expect, our US cash should end the year about $1.4 billion. We expect capital spending for the year to be approximately $1.9 billion. Our current expectation for capital spending in 2013 will be $1.3 billion.

本季初我們在美國約有 23.6 億美元現金。如我在生命科學部分提到的，我們尚未取得 FTC 對 BD 交易的核准。BD 交易將主要以美國現金收購方式進行。若交易如我們預期於今年完成，我們的美國現金在年底應約為 14 億美元。我們預期全年資本支出約為 19 億美元。我們目前對 2013 年資本支出的預期為 13 億美元。

Now I'll turn to our outlook, and I'll start with Display. As we near the end of October, input from panel makers indicates continued strong utilization levels that, if maintained, would result in a Q4 glass market sequentially of flat to down low-single digits. However, our top-down look based on retail demand trends and the level of inventory leads us to a view that the Q4 glass market could decline sequentially between the low-single digits and the mid-single digits, or slightly worse than the panel makers input to us. We're basing the guidance for Corning on this top-down look at the market. Based on this view, we expect volume of our wholly-owned Display business and SCP to be flat to down low-single digits. Our new agreements with key customers, stabilized share at specified levels will help achieve this volume performance.

接下來我談我們的展望，先從顯示器業務開始。隨著 10 月接近尾聲，面板製造商的回饋顯示產能利用率仍維持強勁；若能維持，第四季玻璃市場按季將持平至小幅下滑（低個位數）。然而，我們基於零售需求趨勢與庫存水位的自上而下觀察，認為第四季玻璃市場按季可能下滑介於低個位數到中個位數之間，或略差於面板廠提供給我們的看法。我們對康寧的指引是以這個自上而下的市場觀點為基礎。基於此觀點，我們預期自有的顯示器業務與 SCP 的出貨量將持平至下滑低個位數。我們與主要客戶的新協議，將在特定水準上穩定市占，有助於達成這樣的出貨表現。

For glass pricing, the new agreements we have entered into have mechanisms that establish a relationship between Corning's price and the market price. These new customer agreements will assist us in maintaining Corning's market position at specified levels. We believe these new agreements will allow us to manage our capacity more efficiently, and enable us to continue to improve on our cost position. However, as a result of the agreements, we do expect slightly higher price declines in Q4 than the prior two quarters. We expect to maintain high levels of utilization at our wholly-owned manufacturing sites as a result of these new agreements, and have no plans to expand LCD production capacity beyond our committed supply.

在玻璃定價方面，我們新簽訂的協議包含機制，用以建立康寧價格與市場價格之間的關聯。這些新的客戶協議將協助我們在特定水準上維持康寧的市場地位。我們相信這些新協議將使我們能更有效率地管理產能，並讓我們持續改善成本競爭力。不過，由於這些協議，我們確實預期第四季的價格下滑幅度將略高於前兩季。在這些新協議的帶動下，我們預期自有製造據點將維持高產能利用率，且沒有計畫將 LCD 產能擴增至超過我們已承諾的供應量。

Our new LCD facility in Beijing is now melting glass, and we are shipping in Q4. This facility provide our Beijing customer with outstanding local service, while allowing us to direct capacity in Taiwan and Japan to the very rapidly growing Gorilla Glass business. To close on Display, and I'm sure just until the Q&A portion of this call, as the LCD industry continues to mature, we believe going forward we'll enter a new era marked by more stable share and slowing price declines. We believe our customers will benefit from our recent actions, as it stabilizes supply and allows us to invest in innovation for their current and future technologies.

我們在北京的新 LCD 廠目前已開始熔融玻璃，並將於第四季出貨。該廠可為我們的北京客戶提供優異的在地服務，同時讓我們能將台灣與日本的產能導向成長非常快速的 Gorilla Glass 業務。在結束顯示器業務的部分（至少在本次電話會議的問答之前），隨著 LCD 產業持續成熟，我們相信未來將進入一個以市占更穩定、價格下滑趨緩為特徵的新時代。我們相信客戶將受益於我們近期的作為，因為這些作為可穩定供應，並讓我們得以投資創新，以支援其現有與未來的技術。

Moving to Telecom, we expect Q4 sales to be consistent versus Q3 with normal seasonal declines offset by realization of some of those delayed projects from the third quarter. We believe our Telecom sales will be up in the low-single digits for the year, obviously less than our original expectations established in February, but solid nevertheless, given the European economy and slow downs in some projects. Environmental, we expect sales to be consistent to down slightly sequentially with some seasonal decline from auto customer holiday shutdowns.

轉到電信業務，我們預期第四季銷售額將與第三季大致一致；正常的季節性下滑將由第三季部分延後專案在第四季的實現所抵銷。我們認為電信業務全年銷售額將成長低個位數；顯然低於我們 2 月所建立的原先預期，但考量歐洲經濟以及部分專案放緩，仍屬穩健。環境科技方面，我們預期銷售額按季持平至小幅下滑，主要因汽車客戶假期停工帶來的季節性下滑。

Specialty Materials should have another strong quarter led by Gorilla Glass. We expect sales to remain at the high level of Q3 led by growth in IT and handheld Gorilla sales, offsetting slowing sales of our semiconductor products. Life Sciences, we expect sales to be down about 5% on normal seasonality. At Dow Corning, we expect equity earnings to be up about 25%, driven primarily by a tax rate decline.

特殊材料業務在 Gorilla Glass 帶動下，應會再有一個強勁季度。我們預期銷售額將維持在第三季的高水準，IT 與手持裝置的 Gorilla 銷售成長可抵銷半導體產品銷售放緩。生命科學方面，我們預期因正常季節性因素，銷售額將下滑約 5%。在 Dow Corning，我們預期權益法收益將成長約 25%，主要由稅率下降所帶動。

Now, continuing on with the rest of our Q4 forecast, we expect gross margin to decrease by almost 1 percentage point, driven mainly by pricing in Display. SG&A and R&D will be consistent as a percentage of sales in the fourth quarter. Equity earnings excluding special items should be down about 5% sequentially. Our tax rate for the year will be about 19%.

接著談第四季其餘預測，我們預期毛利率將下降將近 1 個百分點，主要由顯示器業務的定價所驅動。第四季 SG&A 與研發費用占銷售額的比重將維持一致。排除特殊項目的權益法收益，按季應下滑約 5%。我們全年稅率約為 19%。

For FX, the yen has been relatively stable for most of the year. We are hopeful there will be no weakening. As a reminder, our results move with changes in the yen to US dollar exchange rate -- a weaker yen lowers our results, and a stronger yen helps. If the yen averages 1 point higher or lower in Q4, we estimate our sales and net income would increase or decrease by approximately $6 million.

在外匯方面，日圓在今年大部分時間相對穩定。我們希望不會出現走弱。提醒一下，我們的業績會隨日圓兌美元匯率變動而變化——日圓走弱會降低我們的業績，日圓走強則有利。若第四季日圓平均匯率上升或下降 1 點，我們估計銷售額與淨利將分別增加或減少約 600 萬美元。

That concludes my opening comments. I'll turn it back to Ann.

以上是我開場的說明。我把時間交還給 Ann。

Thank you, Jim. Operator, we'd now like to open the lines for questions.

謝謝你，Jim。接線員，我們現在想開放電話線供提問。

(Operator Instructions)

(接線員指示)

Mark Sue, RBC capital.

Mark Sue，RBC Capital。

Jim, if we consider LCD TV penetration rates it appears future LCD demand will be increasingly driven by replacement and more and more it does seem the macro can extend replacement rates for LCD. If we add to this the concerns on monitor demand which is tied to PC units, which has turned negative, I'm wondering if glass volumes may not grow next year unless the environment gets better. Maybe just your preliminary thoughts on volume growth as we move forward. That would be helpful.

Jim，如果我們考量 LCD 電視的滲透率，似乎未來 LCD 需求將愈來愈由汰換需求所驅動，而且宏觀環境看起來確實可能拉長 LCD 的汰換週期。再加上對顯示器需求的疑慮（其與 PC 出貨量連動，而 PC 出貨已轉為負成長），我想知道若環境未改善，明年玻璃出貨量是否可能不會成長。想請教你對未來出貨量成長的初步看法。這會很有幫助。

We are planning on volume growth next year in the business. Obviously, that's somewhat dependent on where the supply-chain ends this year and the amount of inventory. As I indicated, they built quite a bit. But we believe that we will see growth in the glass market next year. We think televisions will growth and we have to keep reminding everybody that size matters here. The fastest-growing segment is the 50-inch and above. Obviously that is a lot more glass for us.

我們規劃明年該業務的出貨量會成長。當然，這在某種程度上取決於今年供應鏈在年底的狀況以及庫存水位。如我所指出的，他們累積了相當多的庫存。但我們相信明年玻璃市場將會成長。我們認為電視將會成長，而且我們必須不斷提醒大家，在這裡尺寸很重要。成長最快的區隔是 50 吋以上。顯然，這對我們而言意味著更多的玻璃需求。

One thing that is very interesting about the television market this year -- sales of televisions below 30 inches, the units are actually negative year-over-year, and that is making it look like a television unit growth is not as great. Obviously could be influenced by tablets but when you look at the 30 to 40, 40 to 50, and 50 and above we're seeing good growth rates and if you take out the small size you are seeing good user growth and obviously the area is really helping us. So we are planning on the glass market growing next year. And we will give out a number in January after we see how the supply chain finished the year.

今年電視市場有一點很有意思——30 吋以下電視的銷售量，年對年其實是負成長，這使得電視整體的出貨成長看起來沒有那麼高。這顯然可能受到平板的影響，但當你看 30 到 40 吋、40 到 50 吋，以及 50 吋以上，我們看到不錯的成長率；如果把小尺寸排除，你會看到良好的用戶成長，而顯然這個區域確實在幫助我們。因此，我們規劃明年玻璃市場會成長。我們會在 1 月、在看到供應鏈如何結束今年之後，提供一個數字。

If I could add to that, I think if you take a look at this year, which certainly hasn't been the easiest economic environment ever, and it's easy to forget that with the price moves down in LCD, because you're not seeing the revenue growth, volume growth is actually quite robust. And there is nothing about that dynamic other than you can have in a given quarter or two supply chain moves one way or the other that we think changes going forward. There's going to be more displays sold in the future than there are now and it's going to continue to be robust and the key thing is getting pricing stable and continuing to drive new apps.

如果我可以補充一下，我認為如果你看看今年，這當然不是史上最容易的經濟環境，而且由於 LCD 價格下滑，你很容易忘記這一點，因為你看不到營收成長，但其實出貨量成長相當強勁。而除了在某一季或兩季供應鏈可能朝某個方向移動之外，我們認為這種動態在未來並沒有什麼會改變。未來售出的顯示器將會比現在更多，而且會持續強勁；關鍵是讓價格穩定下來，並持續推動新的應用。

And the pricing, the changes that you just made earlier on in the year we made some price changes and we saw moderate price declines. We're going to see a dip in the near-term with the new price agreements. How does that revert once we start the year -- does that normalize and so the net of it for the full year is still a lower moderate rate of declines for overall pricing?

至於定價，你們今年稍早做的那些調整——我們做了一些價格變更，並看到溫和的價格下滑。隨著新的價格協議，我們在短期內會看到一次下探。當我們開始新的一年後，這會如何回復——是否會正常化，因此就全年而言，整體定價的淨效果仍是較低、溫和的下滑幅度？

We certainly hope so. Perhaps it would help if we explained in a little more detail how it is our agreements with customers are working and what has changed. Let's start with the way previous agreements worked. We would set a price, we would go out with a price and then usually competition would have to price under us to get share. Now, over time, our premium would build up with this approach, leading to share volume and price volatility. Usually in times where supply and demand got a little bit off kilter.

我們當然希望如此。或許如果我們更詳細地說明一下我們與客戶的協議如何運作，以及有哪些改變，會更有幫助。先從先前協議的運作方式談起。我們會訂一個價格，對外報出一個價格，然後通常競爭對手必須以低於我們的價格來爭取市占。隨著時間推移，用這種方式我們的溢價會逐步累積，導致市占量與價格的波動。通常發生在供需稍微失衡的時候。

Now, let's talk about our approach now. What we have done with these new agreements is to set our market share and set a fixed relationship between our price and the market price. Now, with the agreements that are starting in quarter four, there will be an initial correction to take into account the premium that had built up under the old agreements and that is captured within the guidance you heard from James. Now let's talk about going forward.

現在來談談我們目前的做法。我們在這些新協議中所做的是：設定我們的市占，並在我們的價格與市場價格之間建立固定的關係。隨著第四季開始生效的協議，會先有一次初始修正，以反映在舊協議下累積的溢價；這已包含在你從 James 那裡聽到的指引之中。接著談談未來。

If you just think through the game theory and think through how these things actually work, logic would lead you to conclude that this new approach should give us steady share at the customers, and allow us to smooth our operations as well as reducing price volatility. Of course, the underlying foundation for all of this is always managing glass supply to demand. Now as we look forward, barring supply chain motions in any given quarter, we expect very high utilization and we are not planning to expand our capacity beyond committed supply. And on the supply and demand, also I think something people don't always think through is what we have done to create more balance. So first, we are getting the increased capacity to serve the growth in the display industry from increased productivity, a combination of thin as well as running better. So that has continued to improve the supply level.

如果你從博弈論角度想一想，並思考這些事情實際如何運作，邏輯會讓你得出結論：這種新做法應能讓我們在客戶端維持穩定的市占，並讓我們的營運更平順，同時降低價格波動。當然，這一切的根本基礎始終是管理玻璃供給與需求的平衡。展望未來，若不考慮任何單一季度的供應鏈波動，我們預期產能利用率會非常高，而且我們不打算在既定承諾供應之外擴充產能。另外在供需方面，我也認為有些事情大家不一定都會想得很透徹：我們做了什麼來創造更好的平衡。首先，我們透過提升生產力來增加產能，以支援顯示器產業的成長，這包括做得更薄以及運轉得更好兩者的結合。因此，供給水準持續改善。

Our costs tend to be by the pound and we sell by the square foot. Now as we increase our output, what we are doing is we're freeing up capacity to serve the high-growth Gorilla market which we are also taking thinner This combination does a couple of things. First, it makes it possible for us to more closely match supply and demand which aids in the pricing of LCD. Second, and quite importantly, it enables us to grow our revenues without having to invest as much capital which increases the cash returns for our shareholders and improves our return on investment. As I describe the totality here, you see what we're trying to do is set the table to be able to have an environment of better price stability as well as better cash returns for shareholders.

我們的成本通常是按磅計算，而我們的銷售是按平方英尺計算。當我們提高產出時，我們所做的是釋放產能，以服務同樣也在做得更薄、且高成長的 Gorilla 市場。這種組合帶來幾個效果。第一，它讓我們能更緊密地匹配供需，這有助於 LCD 的定價。第二，而且相當重要的是，它讓我們在不必投入那麼多資本的情況下成長營收，進而提高股東的現金回報並改善投資報酬率。綜合來看，你會看到我們想做的是把桌子先擺好，打造一個價格更穩定、同時也能為股東帶來更佳現金回報的環境。

I see. So it does cap your market share near-term but improves profitability longer-term.

我了解。所以這在短期內會限制你們的市占，但長期會提升獲利能力。

I think cap is an interesting word. What we seek to do -- let's look at what happened over the last year. Basically as Jim said, in the opening, we had a series of motions at a particular customer where one of our competitors tried to significantly increase their share. Here we are a year later, worldwide market shares are basically where they started before all that. And what has happened is just a lot of motion underneath the water but we're back to pretty much where we were before this whole thing started. So we are not taking to gain share overall as a Company. We are happy in the leadership position that we are in. What we are seeking to do is have better stability of our volumes and to have a less volatile environment. We think that's good for customers; we think it's good for the industry.

我覺得「限制」是個有趣的用詞。我們想做的是——看看過去一年發生了什麼。基本上如 Jim 在開場時所說，我們在某個特定客戶那裡出現了一連串變化，其中一位競爭對手試圖大幅提高他們的市占。一年後的現在，全球市占基本上回到在那一切發生之前的起點。發生的只是水面下有很多動作，但我們幾乎回到整件事開始前的狀態。因此，作為一家公司，我們並不是要在整體上去搶市占。我們對目前的領導地位感到滿意。我們追求的是讓出貨量更穩定，並讓環境的波動性更低。我們認為這對客戶有利；也認為這對產業有利。

That's helpful. Thank you gentlemen and good luck.

這很有幫助。謝謝兩位，祝順利。

Amir Rozwadowski, Barclays.

Amir Rozwadowski，巴克萊。

Just to follow-up, Wendell, on some of the commentary around this set relationship and pricing versus market pricing. Does is still involve a premium to competitors and does the mechanism adjust intra-quarter? Specifically, is there some sort of band for market share or if a customer underperforms in a certain quarter, can they have any sort of outlet for the extra glass supply? Just trying to understand the dynamics of the pricing structure.

我想追問一下，Wendell，關於你提到的這種固定關係，以及相對於市場定價的定價方式。這是否仍包含相對於競爭對手的溢價？而且這個機制會在單季內調整嗎？具體來說，市占是否有某種區間？或者如果某個客戶在某一季表現不如預期，他們是否有任何方式可以消化多出的玻璃供應？只是想了解這個定價結構的動態。

I am not going to comment on the exact relationship between our price and the market price for obvious competitive reasons. Now will we see intra-quarter motion? The idea behind the agreements is that the share is that as well as the fixed relationship. So in any given quarter, even for the year, we should not see motion in the share figure. You can see motion in the price figure and then of course overall market demand can move up or down but our share figure locks down. So what that would mean is that most of the dynamic in our customer supply chain would be played out with the other glass suppliers as opposed to us. Does that make sense?

基於明顯的競爭原因，我不會評論我們價格與市場價格之間的確切關係。那麼，我們會看到單季內的變動嗎？這些協議背後的概念是：市占，以及那個固定關係。因此，在任何一個季度，甚至在全年，我們都不應該看到市占數字的變動。你可能會看到價格數字的變動，當然整體市場需求也可能上升或下降，但我們的市占數字是鎖定的。這意味著，我們客戶供應鏈中的大部分動態，會在其他玻璃供應商那裡發生，而不是在我們這裡。這樣說清楚嗎？

That is very helpful. And then switching gears a bit away from pricing, you folks have been very proactive in terms of returning cash to shareholders with a number of dividend increases. Obviously getting towards the tail end of your buyback allocation. I was just wondering in terms of strategically, you mentioned CapEx is coming lower, cash flow generation seems to be improving. Is share buybacks part of a longer-term strategy for the Company at this point? Should we expect some sort of additional announcement post the completion of the current allocation? I would love to hear some color from that standpoint.

這非常有幫助。接著稍微換個話題，離開定價，你們在回饋股東現金方面一直非常積極，已多次提高股利。顯然也接近你們回購額度的尾聲。我想請教在策略上，你提到資本支出（CapEx）將下降，現金流量的創造似乎在改善。在目前這個時間點，股票回購是否是公司更長期策略的一部分？在完成目前額度後，我們是否應期待某種額外公告？我很希望能聽到一些相關說明。

The Board will consider returns to shareholders probably on a regular basis. As you saw in October, Amir, they moved the dividend up by 20%. It's now up 80% over a 12-month period of time. I'm sure they will consider also our cash position and where the cash is and think about share repurchases again. But I would not anticipate an immediate announcement. But the Board will continue to monitor this on a regular basis.

董事會可能會定期考量對股東的回饋。如你在十月看到的，Amir，他們把股利提高了 20%。在 12 個月期間內，股利現在累計提高了 80%。我相信他們也會考量我們的現金部位以及現金所在的位置，並再次思考股票回購。但我不預期會有立即的公告。不過董事會會持續定期監控這件事。

Great, thank you very much for the incremental color.

太好了，非常感謝您提供更多補充說明。

Amitabh Passi, UBS.

Amitabh Passi，瑞銀（UBS）。

Maybe a big picture question Jim, Wendell, for either of you. I was curious, how did the quarter progress? Did you think trends got worse through the quarter? I'm trying to get a sense -- it looks like your year-over-year trends have improved but yet your tone, extremely cautious. Just trying to get a sense for whether the environment is worsening or do you think we are seeing some level of stability at these levels?

也許是一個宏觀層面的問題，Jim、Wendell，兩位任何一位都可以回答。我想了解一下，這一季的進展如何？您是否覺得趨勢在季度內變得更糟？我想掌握一下——看起來你們的年對年趨勢有所改善，但你們的語氣卻非常謹慎。只是想了解一下，環境是在惡化，還是你們認為在目前水準上看到某種程度的穩定？

Clearly as quarter three unfolded, we saw some step downs in two of our businesses and that really occurred primarily in August in Telecom and Environmental. Where Environmental we saw cutbacks in orders from heavy-duty truck makers and in Telecom we just saw business not materializing that we expected. I would say Environmental is continuing to get worse. Telecom has been relatively stable since that step down in August.

很明顯地，隨著第三季的推進，我們在兩個事業看到一些下滑，而這主要發生在8月的電信與環保業務。在環保方面，我們看到重型卡車製造商縮減訂單；在電信方面，我們只是看到原本預期會出現的業務沒有實現。我會說環保業務仍在持續惡化。電信自8月那次下滑之後，相對而言一直保持穩定。

And I think the reason that you see the mix is on the other hand, Display as the quarter moved its way through, both Display and Gorilla were good. And Gorilla got extraordinarily good and is continuing really strong momentum. I think when you step back and look at the total, the strength in our glass side more than offset any issues on Telecom and Environmental. So why you hear the mix in tone is that we want to make sure that we are cautious in the economic environment that we face. But at the same time we are happy with the way in which we're playing out our hand in Display. And in those areas where we have big innovations, you're seeing them behave like big innovations which is, no matter what the wind you tend to sail pretty fast.

我想你之所以會看到這種組合，是因為另一方面，隨著季度推進，顯示器業務以及Gorilla都表現良好。而Gorilla表現得特別好，且動能持續非常強勁。我認為當你退一步看整體時，我們玻璃端的強勁表現，足以抵消電信與環保的任何問題。所以你聽到語氣上的混合，是因為我們希望在所面對的經濟環境下保持謹慎。但同時，我們也對我們在顯示器業務上所採取的策略與執行方式感到滿意。而在那些我們有重大創新的領域，你會看到它們像重大創新一樣運作——也就是不管風向如何，你往往都能航行得很快。

Maybe as a quick follow-up, Jim, the $50 million of restructuring you are taking in the fourth quarter, how should we think about the associated savings related to those cost restructuring plans?

也許快速追問一下，Jim，你們在第四季將提列5,000萬美元的重組費用，我們應該如何看待這些成本重組計畫所帶來的相關節省？

I'm not prepared to give you the numbers yet, but it clearly will be more than what the charge of the restructuring is. By the way, that $50 million we expect to be mostly cash. There's no asset write-offs in it.

我現在還沒準備好提供具體數字，但很明顯節省金額會高於重組費用本身。順帶一提，我們預期那5,000萬美元大多會是現金支出。其中不包含資產減記。

Okay thank you.

好的，謝謝。

Jagadish Iyer, Piper Jaffray.

Jagadish Iyer，Piper Jaffray。

Two questions, Jim. First, I'm trying to reconcile -- you had made a commentary that panel makers utilization are improving. Why should pricing decline in such a scenario in Q4? I just want to make sure that I understand correctly. Is that for a single customer or across-the-board?

兩個問題，Jim。第一，我想釐清——你曾評論面板廠的產能利用率正在改善。在這種情況下，為什麼第四季價格還會下滑？我只是想確認我理解正確。這是針對單一客戶，還是全面性的？

I think I made the comment that customer utilizations improved in Q3. We expect them at best to be similar in Q4, maybe slightly down. From price point of view, our perspective is that we are in a consumer electronics industry. Price is going to come down over time. We expect, our goal is to have price declines every quarter to be moderate if we can. The increase in Q4 versus Q3 on price is, as Wendell indicated, related to the new contracts and some catch up. But our price declines are not just at one customer.

我想我說的是客戶的產能利用率在第三季有所改善。我們預期第四季充其量與第三季相近，可能還會略微下降。從價格角度來看，我們的觀點是：我們身處消費性電子產業。價格會隨時間下降。我們的目標是，如果可以的話，讓每一季的降價幅度保持溫和。第四季相較第三季在價格上的變化，如Wendell所指出，與新合約以及一些追溯調整有關。但我們的降價並不只發生在單一客戶。

And if you take the base heartbeat of what we're seeing on the pricing in quarter four, it is as Jim described, it is that moderate price down that we seek and that we think is going to continue going forward. And then it is just a matter of that switch in approach ends up with us having to overcome that premium that just builds up over time under the old way.

如果你看我們在第四季所看到的定價基本節奏，正如Jim所描述，就是我們所追求、也認為未來會持續的那種溫和降價。接著只是因為方法的切換，最後我們必須去克服在舊做法下，隨時間累積起來的那個溢價。

Just as a follow-up, Jim you talked about that 6 to 7 year timeframe that the product gets refreshed. Given the macro the situation in terms of how we see the uncertainty, how much conviction do have that it is likely to materialize going forward in quarter three? Thanks.

再追問一下，Jim，你談到產品大約每6到7年會更新一次。考量目前宏觀不確定性，你對於這件事在未來（第三季）實現的把握有多大？謝謝。

You are talking about the 6 to 7 year replacement rate?

你指的是6到7年的汰換率嗎？

Exactly.

沒錯。

We remain pretty confident about the replacement rate. Sometimes we see events like in Japan where through the eco-point they pull forward all their replacement rate into a concentrated period of time. But our evidence says that replacement rate is continuing to be along with our expectations. Obviously you have some places in the world where macro vents can overwhelm that, if your economy is really terrible. And clearly in some of the southern European countries that's obviously occurring. In terms of the fundamental of people replacing LCDs, we are now starting to get to the point where in some markets LCDs are crossing over that 5-year age and that's where we start to see it. And we are closely monitoring it. We still think its going to happen.

我們對汰換率仍然相當有信心。有時候會看到像日本那樣的事件，透過eco-point把原本分散的汰換需求提前，集中在一段期間內發生。但我們的證據顯示，汰換率仍符合我們的預期。當然，世界上有些地方宏觀事件可能會壓過這個趨勢——如果你的經濟真的非常糟。而很明顯在一些南歐國家確實正在發生這種情況。就人們更換LCD的基本面而言，我們現在開始進入某些市場LCD跨過5年機齡的階段，而那正是我們開始看到汰換的時點。我們正在密切監測。我們仍然認為它會發生。

I think the other place you have got to look to for replacement rate is the new technologies that are coming. It is really hard to tell what year they will have an impact. Whether it is '13, '14, that is hard to tell. However what is easy to tell is that they will. On very large-size displays you have a tremendous amount of innovation that you are not quite seeing yet, but we are because we are working with folks on it that are going to change the way that customers experience flat panel displays and that will help spur it.

我認為你還必須從即將到來的新技術去看汰換率。很難判斷它們會在哪一年產生影響。是2013年、2014年，這很難說。但容易判斷的是：它們一定會產生影響。在超大尺寸顯示器上，有大量你還不太看得到的創新，但我們看得到，因為我們正與相關夥伴合作；這些創新將改變客戶體驗平面顯示器的方式，並有助於帶動汰換。

And then the other is take a look at notebooks is, one thing we know with high degree of confidence is touch is going to come to notebooks. Right? We have seen a lot of new product sets that people are working on to do that. And they're quite exciting. What we don't know is when the combination of Windows 8, the brands who are designing these new types of notebooks and Intel with some of the processing piece, that it all comes together in a compelling package. Is that '13? Is it '14? It's hard to tell. But what is pretty easy to tell is that is going to lead to both a strong refresh cycle as well as nice new demand for us on both touch and the monitor side.

另外再看看筆電：有一件事我們高度確信，就是觸控會進入筆電。對吧？我們已經看到很多人正在開發的新產品組合來做到這件事。而且相當令人振奮。我們不知道的是，Windows 8、設計這些新型筆電的品牌，以及Intel在處理器等部分，何時會整合成一個具吸引力的整體方案。是2013年嗎？是2014年嗎？很難說。但相當容易判斷的是，這將同時帶來強勁的更新週期，以及在觸控與顯示器端為我們帶來不錯的新需求。

Thank you.

謝謝。

Ehud Gelblum, Morgan Stanley.

Ehud Gelblum，摩根士丹利。

A couple quick things. I apologize for this, but going back to the new contracts in Display, are all the glass providers -- your competitors in Japan and others, have they agreed to similar contracts? So is this an industry-wide thing or is this something that Corning initiated separately and does this go across all of your customers including BOE and Samsung's new China business that you are supporting? And it was asked about intra-quarter pricing, to understand the mechanism, you are guaranteed a certain percentage I assume or share of each one of these customers requirements each quarter. And they decide what the price is? Does it change from quarter to quarter? A little bit of flavor around that would be helpful and then I have a follow-up on Gorilla.

幾個快速問題。不好意思，但回到顯示器業務的新合約，你們所有玻璃供應商——你們在日本的競爭對手以及其他廠商——是否也同意了類似的合約？所以這是全產業的作法，還是康寧單獨發起、並且涵蓋你們所有客戶（包括BOE以及你們正在支援的三星在中國的新業務）？另外有人問到季度內定價，為了理解其機制，我假設你們每季會被保證取得各客戶需求的一定比例或市占。然後由他們決定價格？價格會每季變動嗎？如果能多提供一些背景會很有幫助，然後我還有一個關於Gorilla的追問。

Jim will probably help me through it because you had a lot of questions buried in there. First one was, what are our competitors doing? I don't know, you should ask them. The second one on what customers have we reached these type of agreements with -- the ones that we consider to be significant from a volume standpoint as well as how that particular dynamic is playing out in the customer on what they want to do and how they want to work their way through it. And each customer is a little bit different.

Jim 可能會幫我把它梳理一下，因為你在裡面埋了很多問題。第一個是，我們的競爭對手在做什麼？我不知道，你應該去問他們。第二個是，我們與哪些客戶達成了這類協議——也就是我們認為在出貨量角度屬於重要的那些客戶，以及在該客戶端這種互動關係如何發展：他們想做什麼、以及他們想如何一步步把它處理完。而且每個客戶都略有不同。

The final one is asking on the mechanics basically of it. What we would expect in any given quarter, that once the market share already is set, guidance is across that year. And then in any given quarter, our price is set with a fixed relationship to the market price which we would expect to stay consistent for a given quarter. There should not be significant intra-quarter moves assuming that it all works the way we are planning for it to work. And that is the way the mechanics work. Does that make sense?

最後一個基本上是在問它的運作機制。我們預期在任何一個季度會是什麼情況：一旦市占率已經確定，全年指引就會以此為基礎。然後在任何一個季度，我們的價格會以固定的關係對應市場價格，而我們預期在該季度內會保持一致。假設一切都按我們規劃的方式運作，季度內不應該出現顯著的波動。這就是運作機制的方式。這樣說有道理嗎？

A little fuzzy. Who decides the market price? And that can change from each quarter to each quarter?

有點模糊。誰來決定市場價格？而且那個價格會在每一季之間變動嗎？

There will be a level of detail underneath that I'm not going to want to go into but it is what is the actual market price. And then it will be a fixed relationship between that and our price which should account for any sort of noise that may be in differential perception.

在這之下會有一些細節，我不太想深入，但重點在於什麼才是實際的市場價格。然後它與我們的價格之間會有一個固定的關係，這應該能夠涵蓋因差異化認知而可能出現的各種雜訊。

Okay, helpful. And Jim, CapEx guidance, basically in line for 2013 but a little bit on the higher side of your previous guidance. With macro getting worse, could we see CapEx perhaps come down from that $1.9 billion for '13? And a big picture question, back to you Wendell, is Gorilla Glass in autos. That's always gotten me excited. How far away is that? You talked about that at the analyst day earlier in the year but is that something we can look at in the next couple of years or is that more like 5 or 6 years away?

好的，很有幫助。另外 Jim，資本支出（CapEx）指引，基本上與 2013 年一致，但比你先前的指引略偏高一些。在總體環境變差的情況下，我們是否可能看到 2013 年的 CapEx 從 19 億美元下調？還有一個大方向的問題，回到你這邊 Wendell：Gorilla Glass 用在汽車上。那一直讓我很興奮。那離現在還有多遠？你在年初的分析師日談過，但這是我們在未來幾年內就能看到的，還是更像 5 到 6 年之後？

Ehud, on the capital, you may have misspoken, but the $1.9 billion is this year; our number for next year is $1.3 billion. That was our number that we have had for a while and on the July call we had some risk that it might climb. We now think it won't climb so we're very confident about the $1.3 billion. It's possible it could be lower, but it is $1.3 billion for next year.

Ehud，關於資本支出，你可能口誤了；19 億美元是今年的數字；我們明年的數字是 13 億美元。這個數字我們維持一段時間了，而在 7 月的電話會議上我們提到它可能有上升風險。我們現在認為它不會上升，所以我們對 13 億美元非常有信心。它有可能更低，但明年就是 13 億美元。

And to automotive, we are getting some really nice pull and engagement actually, as recently as this last month. That is the good news. I think you just have to keep in mind that the automotive industry does not move like tech and consumer electronics. So even once you have a platform win, it is a while before that platform win turns into commercialization. So it's got a little bit slower heartbeat, as much as both us and our customers probably wish it went a little faster.

至於汽車領域，我們其實正獲得一些非常不錯的拉動與投入互動，就在最近這一個月也是如此。這是好消息。但你必須記住，汽車產業的節奏不像科技與消費性電子那麼快。所以即使你拿下一個平台案，也要一段時間那個平台案才會轉化為商業化。因此它的脈動稍微慢一些，儘管我們和客戶可能都希望它能快一點。

Great, appreciate it, thank you.

很好，感謝，謝謝。

Patrick Newton, Stifel Nicolaus.

Patrick Newton，Stifel Nicolaus。

The first one, I'm trying to understand the variance in Display results from your very strong wholly-owned business and somewhat weaker SCP results and I was hoping you could discuss share at the problematic customer earlier this year and later last year, whether that stabilized, grew, or contracted sequentially and also thoughts on share with that customer on a go-forward basis. Additionally Samsung announced, I believe it was on Monday of this week, that they are terminating their LCD contract with Apple. I wanted to get your thoughts around how this announcement perhaps impacted SCP's Q3 result and how this could impact your wholly-owned business on a go-forward basis given your exposure to Apple's other qualified suppliers. And then I have a follow-up.

第一個問題，我想了解顯示器業務結果的差異：你們非常強勁的全資業務，與相對較弱的 SCP 結果之間的落差；我希望你們能談談今年稍早以及去年稍晚那家有問題的客戶那邊的市占情況——它是否已經穩定、逐季成長或逐季下滑——以及對於未來在該客戶的市占看法。另外，Samsung 宣布——我記得是本週一——他們將終止與 Apple 的 LCD 合約。我想聽聽你們對此公告可能如何影響 SCP 第三季結果的看法，以及考量你們對 Apple 其他合格供應商的曝險，這可能如何影響你們未來的全資業務。然後我還有一個追問。

I will try and take some of these and maybe Wendell will take the Apple question. Our wholly-owned business was quite strong as we expected when we entered the quarter. That was driven primarily by increased utilization in Japan. You may recall in Q2, our primary customer there had lowered their utilization quite a bit. We expected it come back and a dating Q3 and that really drove the larger increase because of that. We had good demand at our other wholly-owned customers, especially in China.

我先試著回答其中一些，Apple 的問題也許 Wendell 來回答。我們的全資業務如同我們在進入本季時所預期的那樣相當強勁。這主要是由日本的稼動率提升所帶動。你可能記得在第二季，我們那邊的主要客戶把稼動率下調了不少。我們預期它會回升並在第三季體現，而這確實推動了更大的增幅。我們在其他全資客戶也有不錯的需求，尤其是在中國。

For Samsung Corning Precision, basically they have two customers. The utilization rate at those two customers didn't change very much during the quarter. So we didn't really expect to see much change in demand there relative to the one customer, we announced that we had a deal with them for the entire year. I think we made that announcement in the spring and so there really hasn't been any change with that customer since the spring. We obviously expect to continue to supply them and have not yet entered into negotiations for next year. But will and hope to be a supplier with them and continually what we have done over the latter part of the nine months of this year. Wendell, I will turn it to you to talk about Samsung and Apple.

至於 Samsung Corning Precision，基本上他們有兩個客戶。這兩個客戶的稼動率在本季並沒有太大變化。因此，相較之下我們並不預期那邊的需求會有太大變動；至於其中一個客戶，我們已宣布與他們達成涵蓋全年供應的協議。我想我們是在春季做的公告，所以自春季以來那個客戶並沒有任何變化。我們當然預期會持續供應他們，而且我們尚未就明年展開談判。但我們會、也希望能成為他們的供應商，並延續我們在今年後九個月所做的事情。Wendell，我把話題交給你談 Samsung 和 Apple。

For mental and physical health, we try never to talk much about anybody who lives in Cupertino or Seoul. (laughter) I don't want to comment on any of that dynamic. What I will do though is, at the core of your question gets into very high-performance displays. Do we have really nice channel to market either through a direct relationship with the brands or through the appropriate players in the panel display chain? And I would say we feel good about that. And actually with what is going on for us right now in high-performance displays, those very high pixel count displays, as well as creating backplane engines for things like OLEDs, we are feeling stronger and stronger with every passing month rather than vice versa.

為了心理與身體健康，我們盡量不去多談任何住在 Cupertino 或 Seoul 的人。(笑聲) 我不想評論那種互動關係。不過，我會說，你問題的核心其實是高效能顯示器。我們是否有非常好的市場通路：要嘛透過與品牌的直接關係，要嘛透過面板顯示產業鏈中適當的參與者？我會說我們對此感覺良好。而且就我們目前在高效能顯示器——那些超高像素密度顯示器——以及為 OLED 等產品打造背板驅動引擎方面的進展而言，我們是每過一個月就感覺更強，而不是相反。

I guess it was worth a try, Wendell. For my follow on Jim, I want to ask the same kind of display pricing but in a different way looking at the P&L and on gross margin. If we look at gross margin, I understand that the guidance for sequential decline, I think you said pertains to a pricing reset in Display in 4Q. But if I take your comments about the preliminary expectation of volume growth in the display business in 2013, should we expect to see an improving gross margin trajectory as we move through the year given that preliminary thought?

我想值得一試，Wendell。我的追問是給 Jim：我想用不同方式問同樣的顯示器定價問題，從損益表（P&L）與毛利率的角度來看。如果看毛利率，我理解你們對於逐季下滑的指引——我想你說的是——與第四季顯示器業務的價格重設有關。但如果我把你對 2013 年顯示器業務出貨量成長的初步預期納入考量，是否應該預期隨著年度推進，毛利率走勢會改善？

Obviously, it would be a combination of what the volume is for next year and what pricing is for next year. If we achieve what we hope to on moderate pricing and have that carry for the entire year, and with the volume that we think is possible, you might see a slight increase in Display gross margins. And clearly relative to the corporation, it will depend on what the other businesses are doing. The good news for us right now is Gorilla is well above the corporate average. And therefore, like we have experienced in years past with Display, when its pulling strong it actually is helping drive our corporate number up. So in the future when I talk about our corporate gross margins, hopefully they will be less all about Display margins and about the impact of Gorilla helping out.

顯然，這會是明年出貨量與明年定價的組合結果。如果我們能達成我們所希望的溫和定價，並讓它維持一整年，再加上我們認為可能達到的出貨量，你可能會看到顯示器毛利率小幅上升。而且相對於整體公司而言，還要看其他事業的表現如何。對我們來說目前的好消息是，Gorilla 的表現遠高於公司平均。因此，就像我們過去幾年在顯示器業務所經歷的那樣，當它拉動強勁時，實際上會幫助推升公司的整體數字。所以未來當我談公司的整體毛利率時，希望它不再完全取決於顯示器毛利率，而是也包含 Gorilla 的助力。

All right, thank you for taking my questions.

好的，謝謝讓我提問。

Steven Fox, Cross Research.

Steven Fox，Cross Research。

Two questions please. First of all, with return to forward technology trends, I think Apple is highlighting on their new product introduction yesterday, the use of thinner glass and I was curious if that announcement in any way is accelerating the use of thin glass. And if you could tie that into where we are with Willow developments, whether you've had any progress during the quarter. And then secondly, if we could talk a little bit about diesel and Gorilla Glass gross margins. Putting aside the volumes for second, can you talk about where operationally the gross margins are, whether there is more room to improve or you have them at optimal levels? That'd be helpful. Thanks.

我有兩個問題。首先，回到前瞻技術趨勢，我認為蘋果在昨天的新產品發表中強調使用更薄的玻璃，我想了解這項宣布是否在任何程度上加速了薄玻璃的採用。以及如果可以的話，能否把這點和我們在 Willow 的進展連結起來，看看你們本季是否有任何進展。第二個問題，我們能否談談柴油（diesel）與 Gorilla Glass 的毛利率。先不談第二季的出貨量，能否談談在營運層面目前毛利率大概在哪裡，是否還有進一步改善空間，或是已經在最佳水準？這會很有幫助。謝謝。

Great. On the forward tack once again, we're going to follow our general rule of never talking about anybody who lives in Cupertino or Seoul. So I will now generalize. We are continuing to see really a trend that we started in glass which is to push towards thinner, to gain more and more momentum. And you see that in a variety of different product offerings. And it's really validating our strategy from a technical standpoint and from a productivity standpoint. That is great.

很好。關於前瞻的部分，再次重申，我們會遵循一個一般原則：絕不評論任何住在庫比蒂諾或首爾的人。所以我接下來會用更概括的方式來說。我們持續看到我們在玻璃領域早已開始的一個趨勢，也就是朝更薄的方向推進，而且動能越來越強。你可以在各式各樣不同的產品供應中看到這點。這從技術面與生產力面都在驗證我們的策略。這非常好。

On Willow. Willow is a really big idea that we continue to make good progress on both in our ability to do it in commercial levels of production as well as market development. Being said because it's a big idea, in any given quarter, it isn't going to feel like there's a lot of progress on the outside because, until the fundamental supply chain, it changes so much, it's going to take a while for a really strong obvious market pull to arrive. And then when it does, it will scale very rapidly.

關於 Willow。Willow 是一個非常宏大的構想，我們在商業化量產能力以及市場開發兩方面都持續取得良好進展。但也因為它是個大構想，在任何單一季度，外界不一定會覺得有很大的進展，因為在基礎供應鏈真正到位之前，它會帶來很大的改變，而要出現非常強、非常明顯的市場拉力需要一些時間。而一旦出現，它會非常快速地擴張。

It will be one of our classic innovations where everybody will go, what is going on? What is going on? I haven't heard a lot about Willow and then it will turn on like a light which and the really big. And which exact market it's going to hit first, it is hard for us to tell. But we certainly feel good about our progress so far on that. Jim, do you want to touch on margins? And then I will build on diesel?

這會是我們典型的創新之一，屆時大家都會說：發生什麼事了？發生什麼事了？我之前沒怎麼聽到 Willow，然後它就會像開燈一樣突然啟動，而且規模會非常大。至於它會先切入哪一個確切市場，我們也很難判斷。但我們對目前的進展確實感到很有信心。Jim，你要不要談一下毛利？然後我再補充柴油的部分？

I would say on Gorilla, we still feel the potential for margins to improve. They're really quite good right now. We are delighted by them that we think that potential to improve. On diesel, I'll let Wendell comment. My own take is that we made quite a bit of improvement in diesel margins but I think we still have manufacturing projects that when we have the volume will allow our gross margins to improve in diesel also.

我會說，就 Gorilla 而言，我們仍然認為毛利率還有提升的潛力。目前其實已經相當不錯。我們對目前的表現很滿意，但也認為仍有改善空間。至於柴油，我讓 Wendell 來評論。我自己的看法是，我們在柴油毛利率方面已經改善了不少，但我認為我們仍有一些製造專案，一旦量回來，就能讓柴油的毛利率也進一步提升。

Without doubt, that's the case. We've got a lot of momentum there. And now we just need the volume to come on back and I am certain that it will. When is hard to tell but people are going to buy heavy-duty trucks again.

毫無疑問，就是如此。我們那邊有很強的動能。現在只需要出貨量回來，我很確定它會回來。什麼時候很難說，但大家會再次購買重型卡車。

Great, thank you very much.

很好，非常感謝。

Simona Jankowski, Goldman Sachs.

Simona Jankowski，高盛。

A couple of questions. First, when you talked about exiting the quarter with 15.5 weeks of inventory, can you remind us how that compares to what would be a normal level of inventory heading into Q4? Put another way, if you can try to quantify the amount of excess inventory that you see right now and where those pockets are.

我有幾個問題。首先，你提到本季結束時庫存為 15.5 週，能否提醒我們，這和進入第四季時的正常庫存水準相比如何？換句話說，如果可以的話，請試著量化你們目前看到的超額庫存大概有多少，以及主要集中在哪些區塊。

So we would say normal is hard to judge in this business because of all the cycles we've seen. (laughter) But I would say it's definitely more than what we expected to have be there. And I would say that from our perspective, we would say it is probably 50 million square feet, 50 million to 70 million more than we would have expected at this stage. The thing that is harder for us to judge is as the LCD business has grown rapidly in what I will call the more emerging markets, in China as it has expanded in more rural regions is whether the supply chain is more inefficient and therefore that is a reason why we may be seeing more inventory. But I would say that is my characterization of the risk of too much inventory right now heading into the fourth quarter.

我們會說，在這個產業裡「正常」其實很難判斷，因為我們看過太多循環。(笑聲) 但我會說，這肯定高於我們原本預期的水準。以我們的角度來看，可能大約多了 5,000 萬平方英尺，約 5,000 萬到 7,000 萬平方英尺，超出我們在這個階段原本的預期。對我們來說更難判斷的是，隨著 LCD 產業在我所稱的較新興市場快速成長、在中國往更偏鄉的地區擴張，供應鏈是否變得更沒有效率，因此這可能是我們看到更多庫存的原因。但我會說，這就是我對目前進入第四季時庫存過多風險的描述。

And implicit in your guidance for Q4, is that you think some of that may get reduced which is why you are taking a more conservative stance than what the panel guys are saying. Why do you think you have that different view than the panel makers? Why are they not seeing the same dynamics as you are and why are they still planning to run a equal if not slightly higher utilization levels into Q4?

而在你們對第四季的指引中，是否隱含你們認為其中一部分庫存可能會被消化，因此你們採取了比面板廠更保守的立場？你們為什麼會和面板廠有不同看法？為什麼他們沒有看到你們所看到的同樣動態，為什麼他們仍計畫在第四季維持相同、甚至略高的稼動率？

This comes down to something we have been debating with something ourselves. We could fundamentally be wrong and there may be stronger demand that they are seeing that we are not. And therefore they have good judgment on why they should keep running and they're not going to end with that much inventory. That would obviously be a good news story for us, that they don't end up with inventory and retail is stronger. We may be subject to our particular modeling and our experience with the volatility of supply chain in the past but they may be right. And if they are, we'll be happy to ship it to them and we'd be delighted if they ended with less inventory, better retail.

這其實回到一件我們自己也一直在辯論的事情。我們可能從根本上就是錯的，他們看到的需求可能比我們看到的更強。因此他們有充分判斷認為應該持續開工，而且最後不會累積那麼多庫存。那對我們當然會是好消息：他們不會堆庫存，而且零售端更強。我們可能受到自身模型以及過去供應鏈波動經驗的影響，但他們也可能是對的。如果他們是對的，我們會很樂意出貨給他們；如果他們最後庫存更少、零售更好，我們也會非常高興。

Okay and just to follow-up on the whole contract pricing discussion, you mentioned that you have done these contracts now with a number of your larger volume customers but that some customers, like one of your SCP customers, you have yet to renegotiate a contract into next year. Can you give us a sense of roughly -- are you done with the majority of these at this point or do we have another sizable chunk ahead and the reason I ask is trying to anticipate if we may see another pricing reset next quarter as the next chunk of customers get into these pricing readjustments?

好的。接著追問整個合約定價的討論，你提到你們已經和多家大宗量客戶完成這些合約，但仍有一些客戶，例如你們某個 SCP 客戶，尚未把合約重新談到明年。你能否大概說明一下——目前你們是否已完成其中大多數，還是接下來仍有一大部分要談？我之所以這樣問，是想預判當下一批客戶進入這些價格調整時，我們是否可能在下個季度看到另一波價格重設？

We would not expect the correction of a premium to be a recurring theme because at the core of what we are doing, is to have this set relationship. That being said, I think the key thing to watch for as we go forward is going to be supply and demand imbalance, what's happening overall with the market. I think that will be more of the leading theme as well as is the table that we have tried to set here, does that end up playing out the way that we would hope that it would? And logic would say it ought to.

我們不預期「溢價修正」會成為反覆出現的主題，因為我們所做的核心，是建立這種固定的關係。但話說回來，我認為接下來要觀察的關鍵，會是供需失衡的狀況，以及整體市場發生了什麼事。我認為那會是更主要的主軸；同時也要看我們在這裡試圖建立的這套機制，最後是否會如我們所希望的那樣發展。從邏輯上說，應該會。

Just to be clear on why you would not expect the correction of a premium to occur for one more quarter, is that because the amount of volume that at this point has been renegotiated is much larger than what remains to be negotiated or is it because the one that remains the potential adjustment is much smaller?

我想確認一下你為何不預期溢價修正還會再發生一個季度：是因為目前已重新談判的量已遠大於尚待談判的量，還是因為剩下那一個可能的調整幅度其實小很多？

I would say the first is a more correct statement than the second.

我會說，第一個說法比第二個更正確。

Got you. All right, thank you very much.

了解。好的，非常感謝。

John Roberts, Buckingham Research.

John Roberts，Buckingham Research。

Does Dow Corning have its own restructuring plan in addition to what Corning is talking about here?

除了 Corning 在這裡談到的內容之外，Dow Corning 是否也有自己的重整計畫？

Dow Corning does have their own restructuring plan, they have been reducing people ever since the second quarter. But we are not anticipating a special charge. They been doing it on a consistent basis.

Dow Corning 的確有他們自己的重整計畫，自第二季以來他們一直在裁減人員。但我們不預期會有一次性的特殊費用。他們一直以持續性的方式在進行。

Scope it out for us at all -- will it turn their earnings you think? Do they ask that the quarter still declining in terms of earnings?

請幫我們釐清一下——你認為這會影響他們的獲利嗎？他們是否表示本季在獲利方面仍在下滑？

It all depends, John, on Hemlock and that is the wildcard there. As you know, going into the polysilicon crisis that occurred, actually about this time a year ago, this was an extraordinarily profitable business and pricing has plummeted and now we've seen demand into China plummet with the trade wars. So that overwhelms. But I think that silicon margins are likely to grow slightly.

John，這完全取決於 Hemlock，而那是其中的不確定因素。如你所知，在大約一年前這個時候發生的多晶矽危機之前，這是一個獲利極為可觀的業務，但價格已大幅下跌，而現在我們又看到因貿易戰導致中國需求驟降。因此那部分的影響蓋過其他因素。但我認為矽材料的毛利率可能會小幅上升。

We have time for one more question.

我們還有時間再問一個問題。

Mehdi Hosseini, Susquehanna Financial.

Mehdi Hosseini，Susquehanna Financial。

Going back to earlier questions about the industry, how should I think about penetration of LEDs into the overall TV market? And I'm asking that because it seems to me that we are exiting 2012 with a 70% penetration. And yes, there's growth for larger size LED TVs, but doesn't that imply that despite inventories that are coming under control, there could be below average growth until the next catalyst for the replacement appears? Any thoughts you have would be great. And I have a follow-up.

回到先前關於產業的問題，我應該如何看待 LED 在整體電視市場的滲透率？我之所以這麼問，是因為在我看來，我們在 2012 年結束時滲透率約為 70%。是的，大尺寸 LED 電視仍有成長，但這是否意味著即使庫存正在受控，直到下一個換機催化因素出現之前，成長可能都會低於平均？希望聽聽你們的看法。我還有一個追問。

Sure on LED penetration I will just give you some statistics. Actually, the place where LED penetration is really low is the United States. It's only achieved slightly over 50%. Japan is the highest, that's probably no surprise, it is in the 80%s. And Europe has been moving up but still only getting in the 70%. We think LED is an important part of replacement factor. It makes what used to be a thin television super thin, and as you see the ads for this upcoming holiday season people are emphasizing thin. So I think LED is still a driver along with other improvements in the technology.

當然。關於 LED 滲透率，我提供一些統計數據。其實 LED 滲透率真正偏低的地方是美國。目前僅略高於 50%。日本最高，這大概不令人意外，約在 80% 多。歐洲也在提升，但仍大約在 70% 左右。我們認為 LED 是換機因素的重要一環。它讓原本就很薄的電視變得更薄；而從即將到來的假期季廣告也可看到，大家都在強調「薄」。因此我認為 LED 仍是驅動因素之一，並且還有其他技術改良共同推動。

What is the overall penetration worldwide as we exit 2012? Are you implying that it's actually well below 70%?

那麼在 2012 年結束時，全球整體滲透率是多少？你的意思是其實遠低於 70% 嗎？

Yes I do believe its well below 70%.

是的，我確實認為遠低於 70%。

Got it. And then on the Gorilla, and more on the mobile market, should we expect typical seasonality into early next year especially with some of the OEM partners that are already out with the new products, they may take a pause until the next refresh comes in?

了解。另外關於 Gorilla，以及更偏向行動市場的部分，明年年初我們是否應該預期典型的季節性，尤其是一些 OEM 夥伴已經推出新產品後，可能會暫停一下，直到下一次產品更新？

We don't have, unfortunately, a typical seasonality with Gorilla that we have been able to prove. Part of this is that the supply chain is actually far longer in the Gorilla cover glass business than it is in the LCD business. Obviously, there can be some large customers who can have an influence when they do a big rollout. But we have seen customers do more frequent rollouts of models and so it's always possible we have a pause, but right now, we're having a hard time keeping up with our customer demand for Gorilla.

很遺憾，我們並沒有能夠證明 Gorilla 存在像 LCD 業務那樣的典型季節性。部分原因是，在 Gorilla 蓋板玻璃業務中，供應鏈其實比 LCD 業務長得多。當然，某些大型客戶在進行大規模上市時，確實可能產生影響。但我們也看到客戶更頻繁地推出不同機型，因此確實可能出現短暫停頓；不過就目前而言，我們很難跟上客戶對 Gorilla 的需求。

Got it, thank you.

了解，謝謝。

I would like to wrap up. I just have a couple of comments here. First from an IR point review we will be speaking at the UBS Global Technology Conference in New York on November 14. And also we will be at the Credit Suisse Technology Conference in Scottsdale on November 27. We will be delighted to see our investors there.

我想做個總結。我這裡有幾點評論。首先，從投資人關係（IR）的行程來看，我們將於 11 月 14 日在紐約參加 UBS 全球科技會議並發表演說。另外，我們也將於 11 月 27 日在斯科茨代爾參加瑞士信貸科技會議。我們很高興能在那裡與投資人見面。

In terms of summarizing some of the things we've talked about today, we think we have made excellent progress on our plan to stabilize Display and grow our earnings potential in the other businesses. In Display we are delighted with our new agreements with key customers and we think they will give us strong benefits in 2013. Demand for Gorilla is very strong and we expect it to continue into Q4. We've got very good operating cash flow. The Board reacted by increasing the dividend 20%, increasing our 12-month increase in dividends to 80%. We obviously are feeling some effects of the macro economy but management is reacting quickly to control costs through the restructuring and will offset some of those impacts and hopefully allow us to grow earnings in 2013.

就今天討論的一些重點做個總結，我們認為在穩定 Display（顯示）業務以及提升其他業務的獲利潛力方面，我們的計畫已取得非常好的進展。在 Display 方面，我們對與關鍵客戶達成的新協議感到非常滿意，並認為這些協議將在 2013 年帶來顯著效益。Gorilla 的需求非常強勁，我們預期將延續到第四季。我們的營運現金流非常好。董事會因此將股利提高 20%，使我們過去 12 個月的股利增幅達到 80%。我們顯然也感受到總體經濟的一些影響，但管理團隊正透過重整迅速採取行動控管成本，將抵銷部分衝擊，並希望能讓我們在 2013 年提升獲利。

Lastly I would like to make one comment. First of all, on Ken Sofio. Ken continues to progress and appreciates very much people who e-mailed him. And second of all I would like to thank Ann, Linda, and Kelly for stepping in and doing a great job with IR over these past few months. With that I will turn it back to you, Ann.

最後我想補充一點。首先，關於 Ken Sofio。Ken 持續在康復進展中，也非常感謝寄電子郵件給他的人。其次，我要感謝 Ann、Linda 和 Kelly 在過去幾個月挺身而出，在投資人關係（IR）方面做得非常出色。接下來我把時間交回給你，Ann。

Thank you, Jim. Think you all for joining us today. A playback of this call is available beginning at 10.30 AM today and will run until 5.00 PM, both Eastern Standard Time on Wednesday, November 7. To listen, dial 800-475-6701. The access code is 266618. The audio cast, of course, is available on our website during that time. Operator, that concludes our call. Please disconnect all lines.

謝謝你，Jim。謝謝各位今天加入我們。本次電話會議的重播將於今天上午 10:30 開始提供，並持續到 11 月 7 日（週三）東部標準時間下午 5:00。欲收聽請撥打 800-475-6701。存取碼為 266618。當然，在此期間也可於我們的網站收聽網路音訊直播回放。接線生，我們的電話會議到此結束。請斷開所有線路。

Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.

謝謝。各位女士、先生，今天的電話會議到此結束。感謝各位的參與，並使用 AT&T Executive Teleconference。您現在可以掛線。