Corning ( GLW) is expanding its glassworks capacity again to keep up with demand for flat display screens.

The Corning, N.Y., tech shop says it plans to spend $425 million on the third phase of its liquid crystal display glass-manufacturing expansion in Taichung, Taiwan. Corning has now allocated $1.5 billion on expansion of its glassmaking capacity, as flat-panel computer monitors and LCD TVs grow more popular.

Corning says third-quarter sales volume for its display business rose 22%, against the 15% to 20% growth the company had expected.

The Taichung plant will make generation 5.5, generation 6 and generation 7.5 glass sheets used for larger display screens. It also will make larger glass substrates suited to meet the continued strong demand for desktop monitors and the emerging market for LCD televisions.

"Our goal is to keep pace with projected LCD industry demand. However, we will phase the timing of production lines within the Taichung facility to meet the pending supply agreements with customers in Japan and Taiwan," says display chief Jim Clappin.

Corning has kept a rosy view of the flat-panel industry despite frequent fluctuations in the amount of inventory that panel makers, TV makers and retailers have seen.

Corning shares were up 23 cents to $18.75 in after-hours trading Wednesday.

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