Amazon inks multibillion-dollar optical manufacturing deal with Corning

Amazon.com Inc. is partnering with glass manufacturer Corning Inc. to make optical network components for its data centers.

The cloud and retail giant stated today that the deal is worth several billion dollars. Corning will use some of the funds to expand its factories in North Carolina. According to the company, the upgrades will create 1,000 manufacturing jobs and several hundred construction positions.

Shares of Corning closed 5.4% higher on the news.

Corning is a major supplier of fiber-optic cables for data centers. It makes riser cables, which are used to link together the different floors of a data center, and plenum cables optimized for server rooms. The company’s cables ship with specialized jackets that don’t release toxic materials when they come into contact with a flame or water. That helps reduce safety risks in the event of data center malfunctions such as short circuits. 

The company also makes outdoor cables, which cloud providers can use to link together their data centers. The cables come in armored and dielectric versions. The armored variety is designed to reduce scratches, while dielectric cables can be placed near high-voltage power lines without the risk of electric inference.

The fact that indoor and outdoor cables differ in their designs makes it challenging to connect them. Corning provides closest-size systems called universal optical splice enclosures that ease the task. It also sells a device called Centrix that helps administrators manage jumpers, the short fiber-optic cables used to link together servers in the same data hall. Corning says the system reduces the risk of cable entanglement and saves space.

Amazon stated that the glass maker will supply “optical fiber, cable and connectivity” hardware for its U.S. data centers. The partnership comes a few weeks after Amazon Web Services Inc. detailed a new fiber-optic network design called the Random Network Graph. It boosts bandwidth between servers using cables that are arranged in a semi-random configuration.

Corning’s role in the data center market extends beyond fiber-optic networks. It also produces glass for chip production lines that use extreme ultraviolet lithography, or EUV, equipment.

The light produced by an EUV machine goes through a filter called a photomask before reaching the surface of wafers. Corning makes the specialized glass from which photomasks are made. The material, which is also used in space telescopes, contains small amounts of titanium and oxygen. It prevents the temperature variations inside an EUV machine from causing photomask defects that may decrease chip yields.

Corning’s partnership with Amazon comes about a month after it announced a similar collaboration with Nvidia Corp. The chip giant will support the construction of three new optical equipment factories in North Carolina and Texas. Additionally, it will purchase up to 18 million Corning shares worth about $3.2 billion.

Photo: Corning