Corning will build a new fiber optical cable manufacturing plant near Phoenix, AZ that will primarily supply AT&T’s continuing fiber optic network buildout. The new facility, expected to open in 2024, will add about 250 jobs to Corning’s payroll.
“At Corning, our investments in capacity are always based on strong customer commitments, and that’s the case here, with a long-term commitment from AT&T,” said John McGirr, the SVP and GM of Corning’s optical fiber and cable group. “As for who it will serve: This expansion will serve AT&T as well as the broader industry by adding capacity during a time of record demand.”
AT&T, in its recent quarterly earnings update, disclosed that it now has 6.59 million fiber-connected customers and marked its tenth straight quarter with more than 200,000 fiber net adds. AT&T says it’s on pace to cover more than 30 million locations with fiber by the end of 2025.
“This investment is a significant step forward for our country and building world-class broadband networks that will help narrow the nation’s digital divide,” said AT&T Chief Executive Officer John Stankey. “This new facility will provide additional optical cable capacity to meet the record demand the industry is seeing for fast, reliable connectivity. We are also working with Corning to create training programs to equip the next generation of technicians with the skills to build the networks that will expand high-speed internet access to millions of Americans.”
Separately, AT&T announced today that it is deploying fiber internet service to the Mesa, Arizona area, with service expected to be available to Mesa residents in 2023.
Corning said the Gilbert site is part of a $500 million expansion plan for optical fiber and cable manufacturing that started in 2020, nearly doubling the company’s capacity. Optical communications has been one of Corning’s fastest-growing businesses. In the June quarter, optical sales grew 22% from the year-ago quarter to $1.3 billion, about 36% of the specialty glass company’s total sales in the period.
Corning CEO Wendell Weeks said in an interview that the decision to add the new facility largely reflects a commitment from AT&T to continue to source fiber optic cable and systems from Corning. “They are the keystone of this investment,” Weeks said.
AT&T CEO John Stankey noted in an interview that his company has “a very long relationship with Corning that goes back many years,” and now supplies all of the fiber that the company deploys to home and businesses.
AT&T now offers fiber optic service in more than 100 U.S. metro areas, reaching a potential audience of more than 18 million homes.
Stankey notes that the company has plans to reach more than 30 million homes by 2025. The company will add service in Mesa, Ariz., close to the new facility, starting in 2023.
“Ultimately everything is moving to one fiber-fed infrastructure to be able to deal with the demand equation,” said AT&T CEO John Stankey, adding the trends are “all rooted by massively increasing amount of consumption.”
Stankey said that data traffic is expected to grow five times its current level over the next five years. “There needs to be infrastructure to deal with that,” Stankey said.
Although AT&T and Corning didn’t disclose the details of their arrangement, Stankey said that the company has made long-term commitments to Corning, “as we do with other major component providers” that covers pricing, volume and other terms.
At an event in Arizona on Tuesday to announce the new facility, Weeks and Stankey will be joined by U.S. Commerce Secretary Gina Raimondo. Both Weeks and Stankey pointed to the Infrastructure and Investment Act, a measure signed into law last year which includes $65 billion for broadband deployment, as a boost to their confidence in expanding capacity.
“In order to have a foundation to invest, you need consistent and stable policy going forward,” Stankey said. The AT&T CEO said that the Biden Administration has recognized that there is a significant percentage of the U.S. population that hasn’t been effectively served by broadband–and that “the infrastructure act is intended to address that.”
Weeks notes that this is Corning’s seventh fiber optic cable manufacturing facility, and stressed that it is the Westernmost location. AT&T CEO Stankey added that the bulky nature of fiber optic cable makes proximity to manufacturing an important factor. Shipping fiber optic cables around the country is costly.
The new plant is “a great step” in that direction but the supply chain is “large and complex,” and there are many other components to look at as well, said Jeff Luong, President – Broadband Access & Adoption, AT&T.
Corning and AT&T have also expanded the Fiber Optic Training Program that kicked off four months ago in North Carolina, following a joint investment in optical cable manufacturing there. It’s not clear what the cost of the training is or how long it takes to become a fully credentialed fiber installer. The companies said the initial class is currently underway in North Carolina and the program aims to train 50,000 American workers over the next five years. The company said the industry needs another 850,000 workers by the end of the 2025 to carry out planned expansion and maintenance of fiber optic networks.