Morning. I'm Ann Nicholson, Division Vice President of Investor Relations. It's my pleasure to welcome you to our Annual Investor Meeting. I'd also like to welcome those on the conference call as well as our videocast that's on our website. Just a reminder that today's remarks contain forward looking statements related to future events that by their nature address matters that are to different degrees uncertain.
For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward looking statements, see our Annual Reports, Form 10 ks and our Quarterly Reports, Form 10 Q. We do not undertake to update our forward looking statements. Our presentations also include forward looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially. You should also note that in these presentations, we report our results using core performance measures, including core net sales, core equity earnings and core earnings.
These core performance measures are non GAAP measures, and you can find a reconciliation of these measures, mostly directly comparable to GAAP, on our website. We base financial analysis versus other companies on publicly available information. Okay. Now for some logistics. First, there is free wireless for your use during this meeting and reference material is posted on our website.
The information that you need to access both is in your agenda book. 2nd, we have a parting gift for those in attendance. To receive yours, simply hand in your badge at the registration desk on your way out. 3rd, exhibits will be open after the formal presentation until noon. Lastly, please turn your cell phones to vibrate.
So we've got a great agenda today. Our Chairman and CEO, Wendell Weeks, will kick off with an overview of our strategy and capital allocation framework and our priorities over the next 4 years. Our 3 business group leaders, Jim Clappin, Clark Kinlin and Eric Musser, will update you on our near term outlook and growth opportunities in our existing businesses. Marty Curran, our Chief Innovation Officer, will talk about our opportunity with Gorilla Glass for our automotive market access platform. Tony Tripeny, our CFO, will review our outlook and detail our capital allocation plan.
We will then have a Q and A session, followed by a quick wrap up by Wendell. We think you will find the presentations informative, and I am really excited to have you here with us. And with that, I'll turn the podium over to Wendell.
Thank you, Anne, and good morning, everyone. Good morning. Try it again. I know it's so good morning, everyone. It's my pleasure to welcome you to Corning's Annual Investor Meeting.
In October, we introduced our new strategy and capital allocation framework. This framework defines our portfolio and underscores our commitment to excellent capital stewardship. Today, I'll review the framework and how it positions us to deliver secular growth, while consistently returning significant sums to our shareholders. My colleagues will then provide more detail on individual businesses, including both current market and our opportunities for disruptive innovation. First, it's helpful to understand our starting position.
More than a decade of outstanding industrial performance has given us a strong foundation on which to build. Since 2004, we have grown sales, net income, earnings per share and operating cash flow at close to double digit rates. We have outperformed our competition on sales and profit growth in all of our major segments. We have achieved the lowest cost manufacturing position in our key businesses. We have created more than 1,500,000,000 dollars in entirely new revenue streams by launching disruptive products such as Corning Gorilla Glass.
And looking forward, our innovation pipeline is full. So we have a solid foundation for sustained cash flow and a tremendous opportunity set. So how do we use them? Our overall mandate is simple. We will focus our portfolio and utilize our financial strength.
We expect to generate more than $20,000,000,000 through 20 19. We will invest $10,000,000,000 to grow and sustain our leadership. We also plan to distribute more than $10,000,000,000 to our shareholders through annual dividend increases of at least 10 percent as well as share repurchases. And we're executing on that plan. In October, Corning's Board of Directors increased our share repurchase authorization by $4,000,000,000 Over the last 3 months, we executed a $1,250,000,000 accelerated share repurchase.
And just this week, our Board approved an increase in our dividend to the equivalent of $0.54 per year, a 12.5 percent increase. So we're off to a great start on our goal of returning more than $10,000,000,000 by 20 19. Tony will discuss our capital The core of what Corning does is invent, make and sell. We create value by inventing category defining products using transformative manufacturing platforms and building strong trust based relationships with customers who are leaders in their industries. That process has served us well for more than 160 years.
Now, we're seeking to augment that value creation through a more focused and cohesive portfolio that improves our probability of success, reduces the cost of innovation and increases the barriers to entry. We believe this will deliver significant growth and maximize returns on our innovation investments. Let me elaborate. The framework focuses our portfolio on a set of reinforcing capabilities with strong interconnections. We are best in the world in 3 core technologies, 4 manufacturing and engineering platforms and 5, market access platforms.
We know it. Our customers know it. And I'm pretty sure our competitors know it too. Our probability of success increases as we apply more of these world class capabilities. Our cost of innovation declines as we reapply talent and leverage our existing assets.
Additionally, by combining capabilities, we create higher and more sustainable competitive barriers. Focusing our portfolio means that we direct 80% of our resources to opportunities that use existing capabilities in at least 2 of the 3 columns. Few competitors can match our expertise in any one of our focus capabilities. When we combine them, we create market leading positions and margins. Of course, we recognize that Corning is the natural leader for some great opportunities that do not require multiple capabilities.
Now our framework allows us to apply up to 20% of our resources to these opportunities. However, we know that those initiatives are riskier. So we only pursue them if the potential payoff is exceptional. So let's look at some examples of our strategy in action. We already receive high return on our innovation investment.
For example, over the last few years, we've invested in RD and E at double the rate of our peers. On average, they've invested 4% of sales, while we invested 9% of sales. But we have delivered more than 2 times the operating margin or 18% versus their 8% average. Said another way, our additional $1,300,000,000 investment in RD and E returned an additional $2,500,000,000 over a 3 year period. That is a huge premium.
Now when we reapply our talent and leverage our manufacturing and market access platforms, we receive an even higher return. Gorilla Glass is a great example. When we developed Gorilla, we reapplied our expertise in glass science to deliver a new to the world product faster and at lower cost than anyone else could have done. To manufacture Gorilla, we leverage fusion technology and manufacturing assets built for our display business. That saved us about $800,000,000 in capital, significantly enhancing our return on investment.
When Gorilla started, however, we didn't have a mobile consumer electronics market access platform. Our confidence in Gorilla convinced us to build that platform. That decision led to a new business that has put our product on more than 4.5 1,000,000,000 mobile devices worldwide. And in the future, we can apply other capabilities to leverage that market access platform. Our track record in optical communications demonstrates how combining capabilities creates bigger and more sustainable competitive advantages.
Using glass science, optical physics and vapor deposition, we have reinvented optical fiber multiple times, dramatically increasing its performance and lowering its cost. Ceramic science has helped us improve connectors, a critical point of signal loss in communication systems. We use extrusion to make cabling and precision forming to make connectors. We are also exploring the use of fusion to make key components for next generation switches and routers. So our customers benefit from all three of our core technologies and all four of our manufacturing and engineering platforms.
We benefit too. For instance, in the passive optical markets we serve, we capture 20% of the revenue, but 30% of the profit. Now focusing our portfolio means that we'll also consider strategic acquisitions as well as divestitures. We'll add assets that strengthen our portfolio or increase our market access. And we'll divest or realign assets if someone else has more synergies and we believe we can capture that value for our shareholders with a minimum of friction in transaction costs.
Now we're extremely disciplined and patient about these transactions and our track record is strong. The integration of Corning Precision Materials and our realignment of Dow Corning are 2 great examples. A quick refresher, in January of 2014, we acquired full ownership of the business formerly known as Samsung Corning Precision or SEP. Now this strengthened our portfolio in several ways. We gained full ownership of the lowest cost LCD glass manufacturing in the industry.
We extended our supply contract with our biggest customer and we optimized our global footprint by freeing up that capacity to supply any global customer with any Fusion Glass product. We also immediately increased our revenues and net income. We created a new source of long term cash flow. And we are on track to realize more than $600,000,000 in synergies through 2017, exceeding our target by 30%. Now many of you will recall that we paid about $2,200,000,000 Our incremental cash flow due to the deal has been over $500,000,000 per year.
We also liberated $1,300,000,000 in cash sitting at SCP that we previously could not access. So today, about 2 years later, the cash from the deal already exceeds the price we paid. No question. This was a great deal. The realignment of Dow Corning is another example of our framework in action.
Now Dow Corning is a great business, But its silicone products are outside of our focus. We announced our plans in December to exchange Corning's 50% interest in Dow Corning Corporation for a subsidiary that will hold 40% ownership in Hemlock Semiconductor and $4,800,000,000 in cash. We believe this transaction creates significant value for shareholders. The realignment will be accretive to Corning's EPS and our position in Hemlock allows us to capture potential upside from a rebound in the solar market, while also providing pretty good market insight and access for our semiconductor innovation programs. The $4,800,000,000 is approximately 30x the equity earnings from Dow Corning's silicones business.
And we expect the realignment to be essentially tax free. The freedom to redeploy that capital is a tremendous value driver for our shareholders. So that's our framework. It reflects Corning's financial and industrial strengths and our commitment to create value for shareholders through thoughtful capital stewardship. In sum, we deliver value by creating life changing innovations.
We're augmenting our value creation by focusing our portfolio and managing it more cohesively. And we are rewarding our shareholders with significant and consistent cash distributions. Now let's take a quick look at how we're leveraging our market access platforms. We're experiencing strong customer pull from our capabilities across today's businesses. And we keep identifying new challenges that we can address by reapplying and reusing our strengths.
I want to remind you that we have a long track record of recognizing and capturing growth opportunities, especially disruptive opportunities. Every one of our 5 market access platforms began with a disruptive innovation. And we've exploited those initial disruptions to build valuable relationships, brands and insights. But we're not done. Today, we're leveraging each of our market access platforms to seize more opportunities for disruptive innovation and growth.
Optical Communications is currently a $3,000,000,000 industry leading market platform serving major network and data center operators across the globe. Clark will tell you how we plan to leverage that platform into another $2,000,000,000 in annual sales by 2020 through innovation and acquisitions. In Mobile Consumer Electronics, we set the standard for tough thin cover glass. Our product is featured on 4,500,000,000 mobile devices worldwide. Our sales are 7 times the size of our nearest competitor and we have direct relationships with all the major OEMs and supply chain members.
We believe we have the opportunity to double our revenue per device by innovating in such areas as drop performance, scratch resistance, advantage optics to improve readability as well as new form factors and levels of personalization. Our display platform provides us with numerous competitive advantages as well, including the best products, the lowest cost production by a wide margin and outstanding customer relationships. We're leveraging these advantages to stabilize returns and derisk capital investments. For example, we will only add melting capacity if others provide $2 for every $3 of capital required. We'll also activate our capabilities to drive the next round of display disruptions and increase our revenues per display.
Jim will talk more about our opportunities in both display and mobile consumer electronics. Turning to our automotive platform. We sell $1,000,000,000 of mobile emission control products and have built deep relationships with the world's leading vehicle manufacturers. Today, automakers are looking to make cars lighter, safer and more connected. And that creates great opportunities for Corning.
Gorilla Glass offers compelling benefits, including lighter weight for better fuel economy as well as better vehicle handling, toughness and damage resistance to make vehicles safer and more durable and an optically advantage surface for head up displays and for touch. You'll hear more details from Marty. Finally, in Life Sciences Vessels, we have an $800,000,000 business today and our products are in virtually every research lab in the world. Over the past 100 years, we've earned a reputation for quality, consistency and reliability. Today, pharma companies are developing new drugs and delivery systems, but glass packaging hasn't kept up.
We have a big idea and you'll hear more about it from Eric. So you can see we have rich opportunities across our market platforms. If some of them develop as we think they could, they will offer new S curves that support growth regardless of the economic situation. Will all our big time innovations work? Of course not.
Will some of them work? Absolutely. Now the bad news is that timing and scaling disruptive innovation is hard to call because you're turning an industry on its head. You need to change the supply chain and get the entire ecosystem to buy in. But here is the good news.
When it works, it's usually a lot bigger than you anticipate. It tends to be extremely profitable. It drives a really strong growth and it delivers value over decades. Because you're competing against non consumption. It's not a new and improved version of something a customer already buys from us.
We're going in and upsetting an industry by giving people access to a capability they didn't have before. And there's more good news. We've removed a lot of the risk from the equation. The scariest thing about disruptive innovation is the size of the investment required. And it's why so many companies just don't do it.
But because we can leverage existing resources, we have essentially a free shot on goal. Now I'll leave you with the best news of all. We're only counting on the businesses and the products we already have to generate the $20,000,000,000 in our plan. So everything else is upside. Now, please welcome Jim Clappin, who will explain how we plan to leverage our capabilities to drive growth in display and mobile consumer electronics.
Jim?
Thank you, Wendell, and good morning, everyone. Today, I'm going to share my perspectives on Corning's position in the display and mobile consumer electronics market platforms. You might be wondering why these platforms come together under the Glass Technologies Group. Actually, it's simple and a great example of Corning's strategic framework in action. We rely on 2 core technologies and Fusion to serve 2 different market access platforms.
Through these platforms, we connect to our display customers and the customers of our display customers in mobile consumer electronics. The power of these market platforms working together is enormous. Let's begin with display. We are the absolute leader in product quality and features such as flatness, optical clarity, thermal properties, substrate thinness and size. We are half the manufacturing cost of our nearest competitor, which allows us to maintain strong profits while our competitors are struggling with their own profitability.
With this cost advantage and more than twice the sales of either competitor, we garner almost all of the Glass industry profits and our portion is increasing. Putting this all together, we have tremendous competitive advantage, creating options and opportunities unavailable to our competitors. Here's an example. Last December, we announced plans to invest in a Gen 10.5 LCD glass substrate facility to support BOE, one of our core strategic customers and the largest panel maker in China. As part of the deal, we derisked our return on investment by negotiating more than 2 thirds of the $1,300,000,000 investment from others.
By utilizing precious metals already in our possession, Corning's total investment will be $290,000,000 approximately 1 fourth of the total investment cost. In the process, we secured 100% share of BOE's Gen 10.5 requirements through 2028 and extended our long term supply agreement for BOE's Gen 8.5 and below demand through 2025. Altogether, the deal will generate more than $7,000,000,000 in revenue for Corning over this time frame, providing very attractive returns for our shareholders. Our competitive advantage is critical to our strategy to stabilize returns and display. Our strategy can best be explained by a simple equation.
Lowest cost plus stable share plus supply demand balance equals stable returns. Let me explain. Lowest cost by a factor of 2 assures the best profitability in the glass industry. Stable share is an outcome of our superior products, strong customer relationships and our ability to bring innovations of value to our customers. Finally, our manufacturing platform is inherently flexible, allowing us to match operating capacity with demand or repurposing capacity for other markets as we did with Gorilla Glass.
Collectively, we apply this strategy to stabilize returns for our shareholders. Now you might be asking yourself at this point, why don't we use our competitive advantage to increase our share of the LCD glass market? The answer is straightforward. Attempts to gain share through price have only served to erode industry profitability. The Glass industry requires high capital and fixed costs, so investing in new capacity to support share gain while profits are falling hardly supports stable returns for our shareholders.
This is why we believe our strategy is best. Now let's turn to the market situation. In short, 2015 was the worst year for the display industry in the last 5 years on a number of dimensions. We believe the strong dollar and economic uncertainty in Europe and Latin America led to the weakened market conditions. End market growth at 2% in area terms was insufficient to absorb value chain inventory.
This led to panel price declines of 30% to 40% for the full year and ultimately panel maker utilization reductions in the 4th quarter as most panel prices approached cash cost. Despite the worst display market conditions in 5 years, Glass price declines for the full year were the smallest in the last 5 years. The quarter four price decline was the smallest in 2015 and the smallest price decline since mid-twenty 10. This is evidence that our strategy to stabilize returns in Display is working. Turning to 2016, we think Glass demand will grow mid single digits as the supply chain inventory drawdown consumes some portion of the 8% to 10% end market growth.
Let me walk you through the different elements. TV units will grow in the low single digits for two reasons. 1st, falling TV set prices powered by last year's 30% to 40% panel price declines will drive consumer demand. 2nd, we expect the dollar's appreciation against other currencies will not continue to the same extent in 2016 and that modest economic improvement will occur in Europe. China and North America, 2 of the largest TV markets, should continue on the same volume trajectory they've been on for the past 3 years.
TV unit growth rate over the past 3 years averaged 2%. So we don't believe a return to that level in 2016 is a big stretch given these factors. Some analysts may have a different view of unit growth, but as you can see, this is not the largest driver of end market growth. The biggest factor driving end market growth is TV screen size. Aligned with external forecast, we believe average screen size will increase more than 1.5 inches contributing about 6% to end market class area growth.
This increase is consistent with the historical mean and with the same wallet today, a consumer can purchase 5 to 10 inches more diagonal spring size for approximately the same price as 2 years ago. IT units are expected to decline slightly, but growth in monitor and tablet screen sizes will offset unit declines, contributing 2% to end market area growth. In total, we expect the end market as measured in glass area to grow 8% to 10% in 2016. So what does this mean for panel maker glass demand? Let me bring back the chart we used at our recent earnings conference call.
The white line is end market demand and the blue line is glass market demand, both measured in square feet of glass. Simply stated, when end market demand is greater than glass demand, the value chain is consuming glass inventory. We see this situation beginning in quarter 4 last year and we expect that to continue into quarter 1 due to the high inventory exiting last year. Beginning in quarter 2, panel maker utilizations should increase and glass demand will move ahead of end market demand and accelerate as the industry prepares for the seasonally strong second half. The net result is inventory drawdown satisfying a portion of 2016 end market demand and we expect full year Glass demand from panel makers will increase by mid single digits.
Turning to Glass pricing. Quarter 1 is traditionally the highest quarterly price decline of the year. However, 2016 quarter 1 price decline is expected to be among the smallest quarter 1 declines of the last 5 years. In subsequent quarters, we expect price declines to moderate significantly as we believe our competitors will strive to remain profitable. We reduced our manufacturing costs by more than 10% in 2015 and have aggressive plans to continue that trend into 2016.
Altogether, the execution of our strategy combined with mid single digit volume growth will stabilize returns and display. So with stable returns, how do we plan to grow this platform? We will leverage our framework to increase our revenue per display by enabling the display industry to deliver even more lifelike images and advantage form factors. I'd like to share a few specifics. By leveraging our core technology in optical physics, we are introducing innovations that make displays thinner, brighter and more colorful.
Last year, we announced Corning Iris Glass, designed to replace plastic as the light guide plate in edge lit TVs. Iris Glass allows set designers to reduce TV set thickness by as much as 85% and narrow bezel width to as little as a few millimeters without sacrificing color or light transmission, essentially making LCD TVs as thin as a premium smartphone. This year, I am pleased to announce that we have our first customers, and Iris Glass is now commercialized. At CES in Las Vegas, we demonstrated this technology with China's up and coming brand, Le TV, on a sleek 3.9 inches or 3.9 millimeter thick 65 inches UHD set. And the response was enthusiastic, generating additional interest by several large TV brands.
LED TV has commercialized a 70 inches UHD set containing iris glass, which if you live in China, can be purchased for the equivalent of $2,000 We're excited about iris glass because it adds a third piece of glass to the LCD TV stack and could more than double our glass revenue onsets applying this technology. About 1 third of all TVs sold in 2015 are EDGLE, providing a very large market opportunity for Iris Glass. Beyond Iris, we're working with a quantum dot manufacturer to develop a unique solution to vastly improve color gamut at a dramatically lower cost than alternative approaches. The power of the framework is evident. Now let's turn our attention to Gorilla Glass.
Here too, we lead an industry we created less than 10 years ago. We are 7 times the size of our nearest competitor. We are the lowest cost producer by a wide margin. 4,500,000,000 devices and more than 40 brands utilize Gorilla Glass. We continue to innovate with our newest product Gorilla Glass 4 exceeding our adoption rate expectations at a price which has favorably impacted our profitability.
Today, it would be difficult to find a premium handheld device anywhere in the world without a Gorilla Glass cover. Let's examine Gorilla's 2015 performance and the prospects for 2016. In 2015, demand for covered glass grew high single digits in area terms. The smartphone segment grew mid teens driven by unit gains and screen size growth, but was partially offset by weaker tablet demand. We are increasing our share in the growing touch on notebook category as well as at China's top OEMs.
Gorilla Glass 4 grew to nearly 40% penetration for the full year, well ahead of our expectations. In 2016, we expect modest growth in the touch enabled mobile device unit sales. Combined with larger screen sizes, we expect the glass market growth in the high single digits. It's important for investors to note that as this market matures, quarterly Glass demand will be driven more by OEM new device build schedules than end market growth. Our view of the full year is for double digit revenue and net income growth for Corning.
And this growth includes contributions from increased Gorilla Glass 4 penetration and from our portfolio of surface innovations, which I'll talk about next. Our guerilla strategy is to double our revenue per device by delivering innovations that matter most to the consumer. So what does matter? 1st, consumers want their mobile device to survive when dropped accidentally from any height. They prefer readability in bright sunlight, devices that won't scratch, show fingerprints or collect unfriendly microbes.
They may want to personalize their device or add shape without breaking the bank. We are introducing a portfolio of product enhancements which utilize all of our core technologies and in addition to Fusion, leverage 2 other manufacturing platforms. This portfolio is aimed at innovations that deliver greater functionality and end user satisfaction. We already have proof that our strategy is working. We've captured the extraordinary damage resistance of Gorilla Glass 4 in the form of a price premium, increasing both revenue and margins on this glass by double digits.
We will continue to leverage our glass science core technology until cracked screens become a thing of the past. You can expect that more versions of Gorilla Glass will be introduced in the future, providing additional opportunities to increase our revenue per device. Last year, we announced Project Fire, a surface feature which delivers scratch resistance approaching Saphyr with the superior drop performance of Gorilla Glass. We are commercializing Fire for wearable devices this year at a significant premium versus our standard wearable parts. We have already commercialized an antimicrobial version of Gorilla Glass, which is gaining popularity in the public display space and again at a significant increase to revenue from these parts.
These three examples and the innovations in our portfolio give confidence that we will achieve our target and double our revenue per device as these innovations flow into the market. Now I have the privilege of leading 2 large market access platforms. Up to now, I've addressed them separately, but let's sum up by taking a step back and looking at them together. The advent of active matrix LCD created a disruption that we addressed by using our glass science capability to formulate an alkali free glass and our glass and ceramic expertise to build an advantaged Fusion platform. We built market leadership in display and realized that we could formulate a tough class to address needs created by the disruptive advent of smartphones using our existing Fusion assets to produce the new glass.
We built the mobile consumer electronics platform to leverage our existing technology and manufacturing capabilities. Now that we are leaders in that market, we recognize new needs like better sunlight readability and scratch resistance, shapes, personalization and bending light over short distances for augmented reality devices. All of these needs can be addressed by reapplying and reusing a broader set of our capabilities. 2 implications come to mind. First, products like Iris, Fire and antimicrobial glass give us a strong opportunity to increase our sales per device and the ability to drive growth even as unit growth of televisions and smartphones hit maturity.
Additionally, since we are combining multiple world leading capabilities, history teaches us that margins and returns on the required innovations will be very attractive. The second implication is a bit more subtle. We have experienced and strong proof point that Corning can reuse existing Fusion assets to build a new business in a non display industry. That's what makes me so excited about Gorilla Glass for Automotive, which Marty will talk about later, and Architecture, which we will discuss in future analyst meetings. Now I'd like to introduce Clark Hinland.
Thank you very much.
Thank you, Jim. As always, I'm pleased to talk about Corning Optical Communications, and I'm excited to discuss our plan for capturing growth in optical networks. Corning Optical Communications is the global leader in optical cable, fiber and connectivity solutions. We are the industry's only true end to end manufacturer and supplier with a deep portfolio of intellectual property. In fact, Optical Communications is a fully evolved example of the 3, 4, 5 framework that Wendell described.
Over 40 years ago, we leveraged our deep knowledge of optical physics, glass science and low cost vapor deposition to disrupt the telecommunications industry with optical fiber. We followed that up with additional pioneering innovations in cable making and polymer coatings on fiber that leverage extrusion and optical connectors that leverage ceramic science and precision forming. Now coupled with our well developed market access machine, we have been able to deliver a steady stream of high bandwidth passive optical solutions to the entire communications industry, including Carrier, Enterprise and Consumer segments. Corning developed the 1st loose tube fiber optic cable design. We pioneered the 1st plug and play solution for fiber to the home.
We introduced the 1st high density modular data center solution and we developed the 1st all optical wireless DAS solution. This is the fully evolved platform. What it enables us to do that our competitors cannot is to co innovate across our technology, engineering, manufacturing and market access capabilities. Not only does this co innovation machine deliver new components and solutions quicker than our competition by levering and relevering our core manufacturing assets, But we also generate higher revenue and higher gross margin for Corning. Over 70% of our components are industry low cost and solutions generate about 10% more gross margin points than selling components individually.
Now today, we are focusing the co innovation machine on the fast growing edge segments, where we are building upon our leading fiber, cable and components positions and our IP portfolio of more than 2,500 patents to deliver innovative connectivity solutions that lower our customers' total cost and improve network performance. Let me give you some examples of how we enable low cost, high performance connectivity solutions in the home, in the cloud and in your hand. The FlexSnap solution for fiber to the home is the poster child for how we co innovate across the platform. Here, we combined our knowledge of optical physics and ceramic science with our vapor deposition and precision forming platform to develop optical cables with pre installed access points so that technicians can simply plug into the network in a matter of seconds, reducing installation time and cost. In the data center, space is money.
Here again, we leverage the framework. We designed the Edge solution by marrying precision form connectors with ClearCurve, the world's most bend resistant fiber. The result, Edge boasts smaller cables and smaller modules, which double rack density and cut installation time in the data center in half, while enabling the best path to higher transmission speeds. In wireless, in building coverage and capacity pose fundamental challenges. Corning's 1 is the 1st wireless solution to converge nearly every wireless connectivity need into a single unified infrastructure that leverages the virtually unlimited bandwidth of fiber to deliver both coverage and capacity at up to half the cost of alternatives.
1, integrates our deep expertise in all core technology and manufacturing platforms other than Fusion into a system that has recently been chosen by high profile venues like the Staples Center in LA and the new Hudson Yards right here in Manhattan. Execution of this strategy resulted in outstanding performance in 2015. Optical Communications sales grew 12% to $3,000,000,000 last year. This is the 5th year in a row we have grown faster than the market and well above our goal of growing 2x Telecom Industry CapEx. Driven by tech enabled portfolio and continued success in cost reduction, our profit grew 28% to $281,000,000 and we continue to outperform the competition.
Now this performance provides us with strong momentum as we enter 2016. While we expect total telecom CapEx to grow 0% to 2% annually over the next 5 years, the passive optical networking segments will grow about 4%. The edges will grow even faster with fiber to the home at 5%, data centers at 8% and wireless DAS at 10% per year growth. Corning leads in these areas. As a result, we expect to once again grow sales twice as fast as the market, achieving mid single digit revenue growth with profit growing faster this year.
And we expect macro trends enabling this growth to continue in the future. Bandwidth intensity, Cloud computing and the number of devices connected to the Internet continued to grow exponentially. This rapid escalation in the amount and speed of data is creating pressure within the network, especially taxing the predominantly copper electrical edges. This pressure is most acute in fiber to the home, data center and wireless networks where transmission lengths are short, but they lack the capacity to accommodate consumers' needs for data and connectivity, especially in places like stadiums, apartment buildings, homes and offices. So how will this congestion at the edge impact Corning?
Analysis suggests that a combination of economic and physical factors push systems to convert from copper and electrons to fiber and photons once the product bandwidth distance gets to around 100 gigabit meters per second. This threshold is represented by the diagonal line on the graph, which indicates when the economics of carrying photons on optical fiber beat the cost of amplifying electric signals moving on copper networks. Gigabits per second is on the y axis, distance in meters is on the x axis. The lower left side of the chart represents applications that are well served by copper. The upper right, applications better addressed by fiber.
If we look back at the early days of the Photon era, say, the 1990s, this transition was underway in long haul. The size of the bubble here represents the range of bitratedistance combinations required by long haul networks. Network providers realized that it was more cost effective to leverage the benefits of optical fiber and deployed our long haul fibers on mass. The long haul market was being disrupted and we were ready. Now similar disruptions played out again and again over the last few decades and Corning was ready every time with high value innovations to facilitate the transition.
Intercity or metro network providers started to substitute optical for copper in the early 2000s. Today, access and data center networks are encountering the same bandwidth distance challenge. High bandwidth demand in access is limiting copper based technologies such as VDSL to shorter and shorter distances. And while long spans in data centers are already optical, the rapid increase in data rates may soon make optical fiber the most cost effective option for all links, even in racks where distances can be as short as 1 meter. As you can see, fiber penetration is increasing in these networks.
The exciting part is that the conversion here drives demand for our full product and solution suite. While long haul and metro networks have been 100 percent optical for a while, we're now seeing accelerating conversion to optical at the edge of the network as well. Within 3 years, we expect access networks to be 1 third optical and ports and data centers will be nearly 80% optical. And while there will still be huge amounts of copper in the horizontal, the land will begin its migration to optical as well. Even wireless networks are being stressed due to the demand for higher data rates.
For example, the Wi Fi migration from 802.n to 802.11ac. The need for higher capacity is driving fiber closer and closer to antennas, threatening copper in its traditional space. Now longer term, transitions in other segments will occur and create growth opportunities for us. For example, consumer networks, that's the link between our non mobile devices like TVs and desktop computers and the Internet. They're almost all copper today.
At these short lengths, transferring bandwidth for one device is not a challenge. However, we do see a point down the road where fiber and photons will be necessary for reliable transmission of consumer applications like ultrahighdefvideo. The global passive optical solutions market is $15,000,000,000 today. As Wendell noted, we captured 20% of the revenue and 30% of the profit. Now add to that another $10,000,000,000 in key adjacencies like power, cooling and specialty cables, and you have a $25,000,000,000 opportunity for optical telecommunications solutions.
That's more than 8x our revenue, meaning there is significant room for Corning to grow in this space. The opportunity could be even larger when you consider all of the legacy copper out there that ultimately has to be upgraded. We intend to continue to deliver more disruptive innovations, innovations that really matter to our customers to capture more of this market. Now here's a few highlights. For the home, this year, we will combine our knowledge of optical physics with power distribution to create a solution called Stingray that will move fiber even closer to the home and lower operators cost in fiber to the node networks.
In the cloud, we'll marry our expertise in Fusion Glass with our core knowledge of optical physics to create optical backplanes for data centers to help advance the industry to 400 gigabits per second by moving optical connectivity inside servers. For wireless, we're leveraging our capabilities in optical physics by converging GPON and DAS functionality onto one platform, eliminating the need for redundant networks inside the enterprise. Over the next 5 years, we intend to supercharge our position by adding $2,000,000,000 in revenue from organic growth and acquisitions that feed new market access and new products into our co innovation machine. In the near term, we will leverage our recent acquisitions, TR Manufacturing, a leading provider of connectivity solutions for hyperscale data centers and IB Wave, an industry leader in design software for in building network applications to win in both the data center and wireless segments. We'll also use the recently acquired Samsung Fiber Optic Business to gain important Asian market access and a broader Chinese fiber manufacturing presence that will further reduce our costs.
We're very pleased with the initial performance of these deals. In short, we are in the 45th year of a 100 year growth business for Corning. Our 2015 performance was the most recent example. Our differentiation stems from our ability to reapply our core technologies and manufacturing assets to solve new solutions challenges. We're in an industry where most of our suppliers we compete with sell bag of parts components.
We continue to leverage our co innovation framework to offer high value integrated solutions that create measurable value for our customers and that generate higher margins for Corning. While Telecom Industry CapEx will grow 0% to 2%, we will deliver mid single digit revenue growth and faster profit growth in our business this year. The future fundamentals are strong. Bandwidth intensity remains robust and pressure is building at the edge of the network where photons continue to displace electrons. And we plan to add $2,000,000,000 in sales over the next 5 years as our momentum, innovation and execution allow us to continue to beat the competition.
With that, thank you for your attention. Now I'd like to introduce my colleague, Eric Musser.
Thank you, Clark, and good morning, everyone. I'm Eric Musser, and I lead our Automotive and Life Science Vessels market access platforms. A primary goal of both platforms is making the world a healthier place. Whether that means making a cleaner, greener environment possible in mobile emissions or enabling safer, more effective medicines, we're leveraging our decades long leadership in these markets to seize new opportunities for growth. Let's begin with Life Sciences and how we're contributing to drug discovery, development, production and storage and delivery.
Our life science vessel platform began more than 100 years ago with our glass science innovation, Pyrex, a heat resistant glass that revolutionized chemistry and lab research. As research shifted from chemical based to cell based therapies, we broadened our platform with cell culture vessels that set the global standard for advanced cell culture in drug discovery and development, and with bioproduction vessels that enabled large scale and biologic production. Today, Corning is an industry leader in life science vessels with sales exceeding $800,000,000 NPAT margin at about 10%, an extensive global network and an unparalleled reputation for quality, consistency and reliability. We serve leading companies and institutions in academia, pharma and biotech, and over 100,000 customers use our products daily. Our premium brands such as Corning, Falcon, AxoGen and Pyrex are recognized globally.
In fact, virtually every executive in pharma and biotech knows our brands and has experience with our product innovation and quality. We have the number one position in liquid handling, cell culture and adherent cell bioprocessing and our number 2 overall in life science laboratory vessels. Since 2009, we've doubled our sales and have been growing sales and profit faster than competition. This market continues to provide attractive fundamentals for growth, A rapidly aging global population, new treatments for chronic diseases and expansion of health care in emerging markets will create opportunities in research and development. Funding for R and D is increasing.
An example is a 6%, 2,000,000,000 increase for the National Institutes of Health, the largest in over a decade. By focusing on key areas of growth, like genomics, 3 d cell culture, bioprocessing and cell therapy, we're targeting to grow our vessels business at twice the lab consumables market growth rate in 2016 and beyond. But we have an even bigger idea, one that leverages our life science vessel platform for more explosive growth. New approaches and new drugs create new disruptions in an adjacent market that we don't serve today, glass vessels for the storage and delivery of injectable drugs. Glass is the ideal material for drug storage and delivery, and we know the glass used in pharmaceutical vessels today very well.
Remember, we invented it 100 years ago, and it hasn't really changed much in all that time. Does anybody think that medicines and treatments haven't changed much over a 100 years? Of course not. New medicines are creating more aggressive chemical environments that can degrade the glass and shorten drug shelf life. Processes have moved from hand filling to high speed automation.
Storage vessels shifted from molded to tubular glass for single dosages and new delivery devices enabled self administration of drugs, all of which have exposed the glass to more extreme mechanical environments, increasing the risk to patients from contamination and breakage. Regulatory authorities have noticed. In 2011, the FDA issued an advisory to all drug manufacturers on glass quality, and it continues to push for higher pharmaceutical manufacturing quality standards today. We believe we can apply our world class capabilities in glass science, optical physics, vapor deposition, precision forming and extrusion, along with strong customer relationships and about 400 customer facing representatives to invent a new kind of life science vessel, to sell it at a premium and to create a new business for Corning. How big of an opportunity could this be for Corning?
We don't know for sure, but here's one way to think about the size of the opportunity. The current market for these types of products is large, dollars 4,000,000,000 and growing at 6%. In addition, the industry spends another $8,000,000,000 each year to address issues associated with glass quality. Taken together, that's a $12,000,000,000 opportunity for stronger, safer pharmaceutical glass vessels in drug storage and delivery, and it's definitely worth pursuing. Will we win?
We don't know yet. It's too early to tell. And while we're not able to talk about our product or customer engagements due to confidentiality agreements, we are very encouraged by the customer and regulatory pull for our solution. Expect us to come out of stealth mode and describe our innovation and progress over the next 12 to 18 months. In summary, we have a long and successful history in our Life Science Vessels business.
The outlook is good for above market growth with our existing products, and we are focused on a significant disruptive opportunity with pharmaceutical glass vessels. You can expect to hear more details on this exciting opportunity in the year ahead. So stay tuned. Let's now shift to automotive and our innovations that make a cleaner, greener environment possible. Our automotive platform was created more than 40 years ago when in response to the 1970 Clean Air Act, we applied our innovative ceramic and extrusion capabilities to create a mobile emission solution that set the standard for catalytic converters worldwide.
We further leverage these capabilities to develop large substrates for heavy duty vehicles and diesel particulate filters for cars, trucks and off road vehicles. As the global fight for healthier air continues, our cellular ceramic technology remains essential. We are firmly committed to creating next generation solutions that will further reduce exhaust pollutants for decades to come. Today, our clean air solutions are at the heart of emission control systems worldwide, serving leading light and heavy duty customers with our extensive global footprint. Our sales exceed $1,000,000,000 and our NPAT and return on invested capital percentages are in the high teens.
We are the lowest cost producer of light duty substrates, and we've grown profits faster than our competition. In recent years, however, our sales growth has lagged our competition. And that's because we overreacted on capacity adjustments following the 2,009 recession, and we weren't ready to capture some opportunities when the industry snapped back. But since then, we've invested in low cost, high output manufacturing assets for light and heavy duty across our footprint, and we have consistently won vehicle platforms for above market sales growth in 2017 beyond. Our business, like the market, experiences great growth when significant regulatory events occur, followed by periods of flat to moderate growth based on global vehicle demand.
And we've seen this pattern repeat over and over again for decades. For example, we saw 19% sales and 46% profit growth in 2014, setting new records, in part due to the implementation of Euro 6 regulations, which triggered a significant increase in diesel filter demand. Let's turn to 2015. Our sales and profit were consistent with our record 2014 when adjusted for foreign exchange. We expected market growth.
We invested in capacity to support this growth, and we did grow as expected in all markets except for China, where heavy duty truck builds were down 30%. As we start 2016, our outlook for full year sales is to be down slightly from last year. We see continued strength in the auto market but are now being impacted by heavy duty in North America, which is coming off a 2 year peak. As a result, we are carrying costs associated with capacity that is currently underutilized, but is ready and will deliver expanding margins when market volume resumes. And that future volume is already materializing.
In fact, just this week, we extended our supply agreements well into the next decade with 1 of our large heavy duty customers as their preferred supplier with majority share. Overall, we are improving our position with customers and are optimistic that history will repeat and support long term double digit profit growth. One source of that growth is a new regulation that requires a new solution. For example, gasoline direct injection engines or GDI represent 23% of the market and are growing at a 17% rate. Today, none use a filter.
Euro 6C, starting in 2017, introduces real world driving emission standards and requires an order of magnitude reduction in particulates generated by GDI engines. This will require, for the first time, a filter solution, and we are well positioned to address this new regulation. Our innovative gasoline particulate filters enable excellent filtration efficiency while maximizing horsepower and fuel economy. Last year, we secured future platforms, began the validation process with our customers for 2017 production, and we invested in manufacturing assets. You can expect to begin to see these wins materialize in our 2017 sales.
The opportunity is significant. Adding gasoline particulate filters to GDI cars increases our total sales opportunity by a factor of 3 to 4 per vehicle. A second driver of additional growth comes from developing regions, which continue to take action to make clean air a priority. India is implementing BS IV regulations nationwide in 2017 and recently proposed skipping forward to even stricter filter requiring standards starting in 2020. We expect China to continue to strengthen enforcement of its mobile emission standards and to adopt filter requiring standards as well.
We are already working closely with leading OEMs in both regions. We've secured future platforms and are supplying product. I'd like to summarize the power of our Automotive Market Access platform. A regulatory disruption in the 1970s allowed us to build a profitable $1,000,000,000 business with deep relationships as a virtual Tier 1 to leading OEMs. We're well positioned to grow our core mobile emissions business and to leverage our automotive platform to address new disruptions.
And I'd like to introduce our Innovation Officer, Marty Curran, to discuss those.
Thanks, Eric. In Automotive, there are 3 disruptive opportunities for Corning. Cleaner, safer cars with enhanced experience. Let's start with cleaner cars. With the widespread push for more efficient and greener cars, we're seeing the adoption of regulation that requires carmakers to double the fuel efficiency of their fleets over the next 10 years.
Also, electric cars have made headway, growing from less than 50,000 in 2010 to about 500,000 in 2015 and shooting for an estimated 6,000,000 units in 20 24. We've seen the introduction of new lightweighting methods and materials such as aluminum and carbon fiber to improve mileage for vehicles. We also see the push for safer cars, including increased driver protection and technology, Easy to read large displays that support natural integration of augmented reality and self driving features are gaining attention. Finally, the car of the future will be connected. So interactivity will become important to an enhanced passenger experience.
So we see these industry disruptions and we study to understand if there is an opportunity to change the auto glazing and fundamental materials used inside of a car. We concluded that we could do our part to make cars cleaner, safer and have an enhanced experience. So we developed a form of Gorilla Glass aimed at the automotive market. Let's talk about these opportunities. Our 1st generation glazing product is a laminate consisting of traditional soda lime on the outside and inside PVB adhesive layer and then Gorilla Glass on the inside.
Gorilla Glass laminates which can be used in an opening of a vehicle can reduce glass weight by 30% or more at a cost similar to other popular lightweighting materials used today. This bumps up fuel economy and also improves handling because lighter weight on the upper part of the car means a lower center of gravity. Accelerating, cornering, braking, all become better with Gorilla. Gorilla Glass for Auto also increases window toughness. Pound for pound, Gorilla is more than 5 times the strength of standard window glass.
This allows for a car window construction that's greater than 30% lower total mass and yet still provides greater than 3x more flexure or bend capability, 13 times greater damage resistance on the inside Gorilla Ply, greater than 2 times improvement in fracture resistance, I think that seems disruptive and it is. Here's a video showing a projectile coming at a windshield at 120 miles per hour. Both windshields have a soda lime glass layer on the outside but the top image has soda lime glass on the inside layer while the bottom has gorilla. Notice how on impact in this laminate construction, the Gorilla glass layer prevents glass spall from coming into the cabin. Imagine if that was you or your family inside that cabin.
We've tremendously reduced the mass and at the same time showed Gorilla's toughness. Gorilla's toughness and durability can enable a safer environment for passengers. Here's another way that glass plays a large role in safety and enhanced experience. Take today's head up display with the standard soda lime glass laminate. We can create a 3x larger viewing area with dramatically brighter and sharper images with our Gorilla Glass window laminate.
Ghosting that appears during your night driving is reduced by 70% and your night vision improves. All this happens because in the laminated windshield, the Gorilla is so thin and its display surface so inherently flat and uniform. We think we can co innovate with companies to capture even higher HUD performance. That could be important because forecasts indicate the number of head up displays will increase from 3000000 to 9000000 in 2015 to 2020, about a 24% CAGR. Gorilla Laminates advantage for head up displays that allow safer driving might even become one of the key value reasons for car makers to go with a Gorilla Hybrid Windshield.
Now let's turn to the rest of the inside of the car. Today's predominantly plastic, flat and easily scratched interiors can be improved by Gorilla Glass where you get a beautiful thin surface, a 3 d shaped and optically advantaged surface, enabling superior multi touch response and viewing and communication experience. And we can even use our durable anti reflective and fire technologies that Wendell and Jim mentioned to treat the glass surface because it's really hard inside your car to adjust the position of your car screen from the reflections of the sun. The good news is because Gorilla is so tough, we believe we can do this more economically than traditional approaches with heat formed soda lime glass. So the megatrends support cleaner, safer and connected cars.
We looked at participating in these disruptions with our Gorilla Glass and look at the opportunities simultaneously. The current industry moves slowly, so we'll share our progress with you along the way. 1st, do we have a value proposition? The answer is yes. Gorilla Laminates and Gorilla Glass for interior are lightweight, tough and optically advantaged.
2nd, customers' first use in an auto. Last year, we introduced our Gorilla Laminate product announcing that the BMW i8 used Gorilla Glass for auto as an acoustic separation panel for which we were awarded the Supplier Innovation Award, the first use of Gorilla Laminate inside a car. Next, customers use of Gorilla in an auto window. In December, we announced that Ford will use Corning Gorilla Glass in the iconic Ford GT. Sometimes it's best to hear from our customers themselves.
By partnering with Corning, we actually did a multilayered glass system. It's 3 layers, conventional glass on the outside and Gorilla Glass on the inside, which actually gives us a lot of strength at much lower weight. It's really a great example of how we collaborate with suppliers to bring new technologies and innovation to the market. Ford will be the 1st automaker to put Gorilla Glass into production. We chose the Ford GT because it's really the epitome of the latest Ford innovation.
It's a showcase for us in terms of new technologies, new innovative solutions. And it's so performance oriented. We thought it was the perfect execution to demonstrate the power of Gorilla Glass. We're going to save £12 on that vehicle. That weight savings translates into better performance, acceleration, handling, we have a lot of experience in the past.
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have a lot of experience in the past. And we have a lot of is then to prove out the technical execution, the production, manufacturing feasibility that eventually we could explore on future products.
Next, scale the supply chain. In January, we announced a joint venture with Saint Gobain Securit to develop, manufacture lightweight automotive glazing solutions. Saint Gobain is a leading global producer of automotive glazing. Corning will continue to produce and market Gorilla Glass to this JV and other glazers retaining 100% ownership of the glass business. This venture allows us to move forward in the value chain beyond glass to manufacture and sell glazing solutions with a leading producer.
This provides a low cost path for us to scale Gorilla Glass Glazing solutions across the globe. The supply chain will be ready. Next, we made progress in introducing interiors to the market and made headlines at the 2016 Consumer Electronics Show and again at the North American International Auto Show when one rider named Gorilla Glass the number 2 coolest display. We placed Gorilla Glass for auto in multiple interior designs and we're rolling out our new value proposition right now. For the future, we'll tell you when we get our interior design ins, window designs for additional high end models and especially when we place windows in everyday models.
Since OEMs are secretive, it will take some time to announce, but we'll keep you updated. So what could all this mean for us and how should we think about it?
Well, we
know that the glazing market today is about 6,000,000,000 square feet. But the auto interior market is an embryonic one virtually unpenetrated by glass. We've looked at multiple concept cars to see what they tell us about the future and figure those folks have a right to have an opinion. We don't know if it's right, but let's take a look. We measured the window glass, which were mainly laminates.
Assuming only one piece of technical glass, that was about 50 square feet. On auto interior, it's a nascent market, so we measure the inside of these concept cars for that. Given the amount and size of displays, by coincidence, it was also about 50 square feet. So let's do some simple math. 100,000,000 cars, 100 square feet per car.
That's about 10,000,000,000 square feet. To give some perspective, that's about 2 times or more today's display glass market and the price will be about the same as display glass. We don't know if that will happen, but that's something worth going after. In our collaborations in this industry, Corning does what we do best. We apply our expertise in glass and material science to help industry leaders solve tough challenges, unleash new capabilities and most importantly, enhance experiences for their customers.
This is a great example of how our framework works. To sum up, Corning got started in automotive because of the disruption from the Clean Air Act. We've built a $1,000,000,000 business with terrific customer relations and high returns. We're now going to leverage that platform to address a new set of disruptions, cleaner, safer cars with enhanced experiences. We'll apply our glass, ceramics and optical physics capabilities to be able to meet automakers' needs.
And we'll use these fusion assets to fabricate glass and our vapor deposition and extrusion stuff to be able to deliver. This reduces the cost of innovation while increasing our probability of success. Finally, you heard Eric describe our Pharmaceutical Glass innovation and I talked about Gorilla Glass for auto. These initiatives were incubated in the emerging innovations group where disruptive, high reward projects traverse the chasm from invention to commercialization. Talented project teams advance opportunities in startup mode.
Now I'd like to turn it over to Tony Tripeny, our Chief Financial Officer.
Thank you, Marty, and good morning. I am the last presenter between you and some very exciting and interactive exhibits. So I'll get right down to business. This morning I'll pull together what you heard from our business leaders regarding our outlook and then walk you through our 4 year capital allocation plan. As you heard from Jim, Clark and Eric this morning, we have 5 powerful market access platforms and have built leadership positions in our businesses.
We have world class capabilities that we can leverage to capture attractive new opportunities. And we have a focused, cohesive portfolio that increases our return on innovation. All of our businesses have the number 1 or number 2 share position, some by a wide margin and the lowest cost products. For example, we sell twice as much LCD Glass as the nearest competitor. Gorilla Glass is 7 times the size of its closest rival.
We are the performance, share and cost leader for optical fiber. We are the number one brand for laboratory cell culture vessels and we are the lowest cost producer of light duty substrates. We also have a tremendous set of new opportunities within our 5 market access platforms. Some of which we shared today such as Gorilla Glass for auto, pharmaceutical packaging for drug storage and delivery and Iris Glass for displays. Now coming into 2016, there's no question that the economy is affecting our markets and we expect to feel the effect on our first quarter and first half results.
But despite these economic headwinds, we have bright spots. Our LCD glass price declines in the Q1 are the smallest first quarter declines we have seen in 5 years. We expect sales and specialty materials to grow low teens. Our optical communications business expects to grow sales and profits faster than the overall industry. In Life Sciences, we expect our vessels business to grow at twice the lab consumable market growth rate.
And environmental is winning platforms to drive future growth. So while it's no surprise the economy is limiting our growth in 20 16, overall we are well positioned in our markets and expect meaningful growth over the next 4 years. And even in a difficult macroeconomic environment, we are consistently generating strong operating cash flow. So our focused portfolio will deliver sales growth, profit growth and strong operating cash flow over the next 4 years. Now let's shift to how this plays out in the capital allocation plan.
This model describes the sources and uses of the greater than $20,000,000,000 of cash we plan to deploy through 2019. Let's first look at the sources. In October, we shared our plan to generate $14,000,000,000 to $17,000,000,000 in operating cash flow, excluding RD and E over the next 4 years. We are confident in our plan. And here's why.
1st, we have strong operating cash flow from our leading share and cost position I already mentioned. And second, we modeled downside scenarios including weak economies and business situations such as pricing pressure for LCD Glass and fluctuations in the yen. Now as a quick refresher, we sell our display glass in yen. We have been hedged through 2017 at an average rate of 99. With the stability our hedging program gives to our display cash flows, investors have been asking, what happens in 2018 and beyond?
We said we would consider extending our hedge position as we gain certainty on our future flows and when the currency markets offer an attractive yen dollar rate opportunity. On our recent earnings call, we were happy to announce progress on this front in 2 ways. Late last year, we extended our supply agreement with our 2 largest customers. We extended our agreements with Samsung through 2025 and BOE through 2028. This greatly increased our confidence in future flows.
On the rate front, we took advantage of the recent volatility in the currency market and the brief strengthening of the yen to add to our hedge position. We are now hedged for approximately 70% of our anticipated GenFlow from the time period of 2016 to 2022 at an average rate of 106. The additional hedges from 2018 to 2022 are spread evenly over those 5 years. So for those investors who were concerned about our yen exposure beyond 2017, this action should mitigate those concerns. And because our capital allocation framework factored in weekend scenarios, the additional hedges give upside to our expected operating cash flow in our 4 year plan.
So while the yen will always be an important topic, we significantly reduced the downside risk and are confident in our ability to generate and deploy more than $20,000,000,000 over the next 4 years. When we introduced our capital allocation plan to investors last October, we noted that we did not include potential future transactions in our cash generation plans and that they could provide upside. In December, we announced our strategic realignment of Dow Corning. This is a great transaction that will unlock significant value for our shareholders, including EPS accretion. Now here's a quick update.
We expect the Dow Corning transaction to close by June. When it closes, we'll have a wholly owned subsidiary with a 40.25 percent interest in Hemlock and $4,800,000,000 in cash. For your models, you should know that we will continue to report equity earnings from Hemlock. Last year, they were $69,000,000 From a cash standpoint, you should add the additional $4,800,000,000 of cash to our balance sheet and reduce the projected operating cash flow by about $800,000,000 over the next 4 years from the loss of dividends. As you think about our 4 year capital allocation plan, the additional cash increases the amount of funds available for deployment from the $22,000,000,000 to $26,000,000,000 we discussed in October to $26,000,000,000 to $30,000,000,000 through 2019.
Now we'll provide more details when the transaction closes. So we're very confident in our cash generation. Now let's talk in more detail about how we'll use that cash. We plan to invest $10,000,000,000 to grow our businesses and sustain our industry leadership. More specifically, we'll spend about $2,000,000,000 on RD and E, dollars 6,000,000,000 to $7,000,000,000 on capital spending and $1,000,000,000 to $3,000,000,000 for M and A.
Now, RD and E spending supports new product development as well as innovations for new processes and cost reductions. One thing to note is this number is after tax. Pretax spending remains in the $775,000,000 to $800,000,000 per year range. We plan to keep RD and E spending in dollars relatively steady through 2019. And we're able to do this because our focused portfolio approach provides higher returns on our innovation investment.
Now this morning you heard how we leverage our core capabilities to capture growth opportunities in our markets. And we have the assets in place to feed this growth. So similar to RD and E, the capital spending intensity in our plan doesn't grow significantly. Now a good example of how this works is the capital spending required for our Gorilla Glass for Auto opportunity. Because we're repurposing our Fusion assets, it will require very little capital spending to capture the first several $100,000,000 in sales.
For 2016, our total company capital spending is expected to be approximately $1,300,000,000 in line with 2014 2015 spending. As you look at our 4 year plan, you can see that the total of $6,000,000,000 to $7,000,000,000 is more than the current run rate. That's because we factored in CapEx increases for new business growth in the out years. And we'll continue to use rigorous return criteria such as return on invested capital for our capital spending decisions. Our plans for M and A over this 4 year period total $1,000,000,000 to $3,000,000,000 We will look for opportunities where we can strategic advantages by strengthening our portfolio or increasing our market access.
Now we completed several deals in 2015 that did just this and you can expect us to invest in M and A to grow our industry leadership. So to sum up our use of cash for growth, we expect to generate growth and excellent returns on the $10,000,000,000 we will invest over the next 4 years. Let's also look at the details of shareholder distributions here. Our ability to return cash to shareholders has increased with the magnitude and stability of our cash flow. Under our new capital allocation plan, we will deliver annual double digit dividend rate increases and continue to be opportunistic on share repurchases.
As a result, we will return more than $10,000,000,000 to shareholders. Now interestingly enough, the value of our program is approximately 1 half of today's market cap. So stepping back through 2019, we'll increase our dividend by more than 50% and our total cash return to shareholders is roughly a 10% average annual cash yield. And we've been active already. In October, our Board authorized $4,000,000,000 for share repurchases.
We completed a $1,250,000,000 ASR in January. And 2 days ago, we announced a 12.5% increase to the dividend. So the summary of shareholder returns is simple. We plan to direct more than $10,000,000,000 to shareholders with transactions providing upside over the next 4 years. Here's what I'd like you to take away from my presentation.
Despite macroeconomic headwinds in 2016, we expect meaningful growth over the next 4 years, driven by our strong share position and lowest cost manufacturing. We are confident in our ability to generate significant operating cash flow and we have significantly reduced our cash flow risk by expanding our hedging program. We expect to deploy $22,000,000,000 to $26,000,000,000 or more in cash in our capital allocation plan over the next 4 years. And we're investing in a great set of opportunities that will grow our company and expand our leadership position. And we'll also return greater than $10,000,000,000 to our shareholders.
I look forward to updating you on our progress over the next 4 years. So now I invite my colleagues up to the stage for Q and A. Thank you.
What we thought we'd do is we take a little bit of time to do Q and A before we open up the exhibits that have created such a stir with our customers and industry partners. So let's begin. Dan?
Thanks. Good morning. Steve Fox from Cross Research. Two questions from me. Wendell, first of all, thanks for all the great detail on how you're advancing some things.
If I was going to nitpick on one area, maybe it would be auto, which you've been talking about for a number of years. Can you maybe sort of grade out how it's advancing versus maybe original plans and layout a new updated time line for really penetrating the market with Gorilla Glass? And then secondly, in terms of the optical commentary, it was interesting to hear the adjacencies. Are any of the adjacencies that you're pursuing internally developed? Or should we think about that all as externally driven?
And if you can give a couple more examples, that would be great.
Terrific. Well, let's start with auto. And since we're blessed to have Marty here, who's leading this overall effort, why don't we let him take that? And then I'll turn to Clark on the optical adjacencies. Thanks.
And Steve, I think that on auto, it is frustrating sometimes how long it's taken to be able to do that. But you do have times where when you win an application readiness, when you've proven through, you still have 2 to 3 years before the models come out. So you have to remember the very, very beginning was all about being able to see if this worked in construction and then taking it through application readiness at particular automotive places. And then as that happens, momentum begins to go and you get this knee. What I think is most interesting about how to think about this, at least for me, At this time last year when we talked about it, we talked about the main benefit being light weighting.
And I think what you'll see back there with Jeff's wonderful Connected Car is the head up display turned out to be a huge benefit. Again, this is what happens with innovation. You don't know when it shows up. The other very interesting thing that we're running through a bunch of tests right now and continue to do that, stay tuned, is how tough this really is. When you do this asymmetric construction with a thick piece of glass and then very thin gorilla, I think that our windshield is going to be 2x as strong.
So chalk it up to automakers being very thoughtful and careful. They wanted to see their supply chain ramp up. It's very nice that we bring an invention, but having a solid partner like Senko Band with us in Glazing and being able to make the window was very, very important. And then I would stay tuned to this space. I think we finally have the position that took us way too long to get.
I'll answer the question on optical adjacencies. I mentioned in my comments that we expect to grow about $2,000,000,000 over the next 5 years. I think about that as we're going to get about half that growth organically and probably half that from acquisitions. And that when I think specifically of adjacencies, the answer to your question is both. So I talked about Stingray here.
Stingray what Stingray basically does is it utilizes a buried copper drop to pull fiber really close to the home and a fiber to the node network. So that's basically disrupting somebody else's platform. That innovation is about optical physics plus power, plus chip based technologies and that all has been developed inside our company. I'll contrast that with our desire to get into inside building architecture and design for wireless networks. Basically a software capability, not a core part of our capability set, but a very real adjacency in the wireless space.
And in that case, we went out and bought IB Wave, which has built that capability for us as a leader in the space. And we're now leveraging that to create essentially the similar capability to do outside plant fiber to the home design software for our company. So I think that you should expect adjacencies to pursue be pursued both by inorganic and organic means as we go forward.
Great. I'll just have 2 quick brief comments, Steve. First on auto, I just would wait until we get an everyday platform before I'd start building it into the growth models. And because we don't have to invest a lot of capital and I don't think you have to think about it deeply yet. And when we announce an everyday model, then the business will you'll start to feel it, but no hurry until then, right?
We still got a ways to go. If we do that, this would be like the quickest materials innovation that the auto companies have ever done. So fingers crossed. And I think the way I think about Opto is the innovation will be organic, but we'll see us by market access on that electron photon divide so that we can bring our innovation to an established platform and rather than fight the incumbent who lives in the electron world, we'll bring our photonic expertise to bear on their ops. Where do we want to be?
Let's go back to this side. Great.
Hi, guys. Thanks for taking my question. Rod Hall with JPMorgan. I've got a couple here. I wanted to, first of all, ask about the TV unit growth assumptions and whether you guys can link those to GDP growth.
Is there a GDP growth assumption that you're making underlying that assumption? So we can kind of and then can you give us any idea what the flex there might be if those growth assumptions don't pan out? Second thing I wanted to just quickly ask Life Sciences growth rate, you said 2 times the growth rate of the market, but I didn't catch a market growth rate there. So if you could give us that, that would be helpful. And then maybe a quick update on Fire.
The Specialty Materials ramp in the back end of the year is pretty aggressive. I wonder if you guys could talk about whether that includes some assumption for a lot more growth in the fire product or some other product that we're not aware of? Thanks.
Great. Good set of questions. Let's start, Mr. Clapin, with you. And why don't you touch on both the unit piece as well as fire?
And then we'll go to Eric on Life.
So the long history of color television is that GDP has little impact on its growth rate. You can go back and look back to the big advent in 1972 and you track the growth rate over that period of time and yes, sometimes recessions impacted, sometimes recessions don't, right? But it's been a pretty steady 2% to 3% increase over time. And we said that, if you recall in my remarks, I talked about Europe and I talked about Latin America, right? Both those regions were negative for the full year in terms of area growth, right?
So part of the reason a big part of the reason, of course, is the strength of the dollar. I think you all know that the cost of a TV set is mostly in dollars, but they're sold in regional or local currencies. So when the dollar gets real strong, right, the set makers has a dilemma. Do I raise my price? Do I not lower my price?
And that has an effect on sales, as we well know. The price elasticity is well established. But we do expect improvements in both of those economies this year. And so much of the unit growth is showing up as you might expect in those regions because in North America and China, those 2 very large TV markets, we're basically predicting the same growth as we experienced in 2015. Okay.
But you saw how we presented the information. I mean, if it's 1% or it's flat, right, the bigger driver is TV screen size. And I think there's a lot of consensus around that. So
Great. Do you want to touch a little bit on back half ramp in Specialty and what's really driving it? Is that FHIR or is that customer launch programs? Yes.
So it is thank you. It is more driven by customer launch programs. Quarter 1, there's virtually no activity on the new build side. Some might show up from our standpoint towards the end of quarter 1, but we do expect that to pick up significantly with the big makers launching new models in Q2, actually the second half of the year. But obviously, it takes time to build in preparation for those launches.
There is we are having we are showing revenue in our plan for Fire, right? It's not huge because it takes time to introduce something like this into the supply chain. As I said, it will be predominantly in wearables where the scratch value prop is quite high. I don't know about you, but I'm always banging my watch into something. This is sapphire on this watch, but it doesn't scratch.
But fire approaches sapphire in terms of scratch resistance. And that's what the value prop is without sacrificing any drop performance. In fact, we have some data that suggests even improves drop performance to some degree. So we're excited about it. Wearables, we think, is first.
And then, of course, the same may apply to handheld devices in the future.
Great. Eric, do you want to touch base on what you think the industry rate is in vessels? Sure. The segments of
the Life Science Industry that we participate in has actually been in a very low growth environment for about 5 years right now, somewhere between 0% 2%. And a lot of that is because of the challenges with public funding in North America and Europe and in other markets as well. As I mentioned, we think that the environment for increased funding is getting more favorable, the NIH example being one of those. And so what we're looking for this year is about 2% growth in the Life Science Vessels market. And we're challenging ourselves to grow initially about twice that prior to any impact on foreign exchange on our sales.
And we think that we can do that because we have strong position in areas where there are higher growth rates, as I mentioned, like in genomics or cell culture, but also in regions like in China where we have a very solid presence and it's been growing near high single digits, low double digits over time. And then finally, a component of sort of a small basket of newer innovations that we're selling across our portfolio. So you put all that together and what we're challenging ourselves to do, as you heard, is to grow about twice that market rate.
Sorry, I'm having a hard time seeing. So thank you.
James Foster from Morgan Stanley. Just a couple of questions. First, I'm wondering, Tony or anybody else, if you can give a little more color on why the much better pricing environment for 2016, How much of that may have to do with capacity reductions in the industry versus, as you put it, other competitors getting so close to breakeven that they need to continue to try to operate in profit ranges, etcetera? And then my second question was, I guess, more of a market question is that Irish Glass, you've got the first win for a television and for that product with the late TV. What's your how should we be thinking about potential for additional design wins going forward?
And how are you thinking about the opportunities for that to drive incremental growth? Thanks.
Terrific. Tony, why don't you take a shot at the first pricing question, what's driving that smaller price declines? And then we'll come to Iris and Mr. Clappin.
Sure. I think the it's really a combination of both the things that you mentioned. Clearly, as the industry gets closer to their breakeven point, the ability to actually give price declines get impacted. And in addition to that is you take capacity offline, then you I think that has a positive impact from a cost standpoint. I think what's important to keep in mind is that what's happened in the industry over the last 6 months has been a really difficult industry environment.
It's the worst industry in 5 years, and we've seen the smallest price declines. And we consider that to be very important. It was important in 2015. It was important that the fact that that's true in Q1 of 2016 makes us feel very good about where we are from our ability to stabilize returns in the display business.
Great. Jim, do you want to tackle Iris?
So we actually have commercialized Iris through 2 set makers, the one I described up here and the other is Sharp. Sharp is selling that TV only in China, but it is doing reasonably well. Again, the thin form factor is particularly appealing to consumers in China. China is very interesting market. Thin is very attractive to that market and size is very attractive to that market.
And Iris is best represented as a large, very thin TV. So it's not surprising that it's starting there. Now at the Consumer Electronics Show, we demonstrated the 65 inches and we've been getting many calls. People want to talk to us now. Remember, form factor is something that in the past, well, even up to now benefited the OLED technology over LCD.
But today's technology, the 3.9 millimeters that you saw up here, for all practical purposes is as thin as an OLED TV, right? So LCD makers who want to protect their position in the TV market, right, are interested in offsetting any advantage OLED may have. So a lot of discussion with our customers going on now, and I think that we'll see more design wins in 2016.
Terrific. Do you want to go here?
Doug Clark from Goldman Sachs. I want to come back actually to the comments on OLED a little bit, more specifically the potential impact of a shift to plastic or film encapsulation layers, where we're seeing it a little bit in smaller form factors. Wondering if you can talk about how that perhaps impacts your business either in the small form factor, but then also to the extent that it could encroach upon larger TV screen sizes, for example? And then a quick one for Tony as well. A question that we've been getting a lot is on the yen rate beyond 2017, if it's a linear or excuse me, flat rate that we should assume or if it's something that actually increases or changes over time throughout the years?
Thanks. Great. On OLED, Mr. Clappen, why don't you start and I may add something. And then Yan, Tony.
You can start with Yan.
Okay. Yes. You should assume a flat rate over those years.
You done? I'm done.
Thank you for that easy question.
So OLED has a very attractive value proposition in small in small size for small devices. It is thin. It has low power consumption because there's no backlight. And colors, quite nice. And so we are seeing rapid penetration of OLED in small size.
Now it's not all the flexible OLED or the plastic OLED. In fact, it's only about 10% of the market today. The balance is a typical OLED made with 2 pieces of glass, backplane and then the cover material or the encapsulation material. Now I think there's a lot of interest in flexible OLED. Some room for form factor and shape.
And so we expect that to accelerate over time. So today, the way that is made is actually on a piece of our high performance display glass. They actually build on a polyamide plastic the TFTs on that surface and then they remove it from that surface after processing. The end cap is a thin film encapsulation. It is not glass.
But I think the one thing that will slow it down and keep it in the flexible in the conformable or flexible space is just more expensive. There's 7 or 8 layers comprising that encapsulation and they are expensive, right? And of course, it's not as good of sealant as glass. So from a life standpoint, it will be challenged, which says that it's going to be a long time before it winds up in bigger devices, right? They have a lot and it's expensive, right, life.
Bigger devices are probably a ways off. And while I'm on it, OLED TV, we mentioned that just a minute ago. LCD, amorphous silicon LCD has done incredible things over the years to beat back potential competitors And we see it underway again, right? So you got Iris Glass reducing the thickness of an LCD TV. They wipe that form factor advantage out with that technology.
And then quantum dots, which actually improve LCD color beyond OLED. So what you have left is basically dark contrast ratio. Because even on the bright side, they're not advantaged, believe it or not, right? So I think LCD is in pretty good shape going forward. We'll see some penetration, but I think it will continue to be the dominant technology for some time to come.
Yes. I'd just add quickly is that, so this really first started to arise as a deep question both technically and from our investors about 5 years ago, when we had a couple of our customers promoting the idea of OLED TV in a very strong way. And it's always hard to predict how technology nodes get resolved. But our opinion 5 years ago was that we could not see OLED's advantages offsetting their significant disadvantages to become a factor in large size and that was right and we continue to believe that. And in though we also said 5 years ago, small size, we're interested.
And it drove a lot of our innovation efforts. 1st, in the rigid format, in small size for OLEDs, which uses high performance glass in 2 pieces. And then 2nd, in the plastic format, for conformable displays is where we thought that would go. And for that, you need our mother glass together with highly protected piece of Gorilla. And then the final piece, you heard us talk a lot about, I think last year or the year before, which is truly flexible displays.
This is a major effort going on in the industry and that you just couldn't be more intimate with it than we are. And that's why you hear us talk about flexible glasses. More to come there. For those to work, I personally believe you're not only going to have to build it first on Glass, but the glass is also going to have to be in the stack in some other way. But there's still some interesting problems to solve to make a truly flexible display work, both in moving the electrons around as well as how do you actually make a reliable display.
My name is Amar Lal, and I'm an individual shareholder since 2003. And first, my hats off to you and your team for really doing what you said. At this meeting in 2011, you said you were going to be a $10,000,000,000 business in 2015, and you pretty much nailed it. So nice job. So do you have a similar projection for 2020?
I didn't do all the ads in your presentation, but there's some great opportunities. So just putting you on the spot here.
Thank you so much. I'll take that one myself rather than give that to Tony. We're not ready to do it yet. And it's not because we're being coy. What it comes down to is which one or how many are some of these big disruptions are going to work.
And they have the power within them to add tremendous amounts of growth, tremendous amounts. It's hard to call timing, but the revenue opportunity here is like double us sort of opportunity. When do they happen? Do we win? Those will be the key.
So what we're trying to substitute in this time is to instead be a little less transparent about the actual target that we're setting for ourselves. But be more transparent about these are the next milestones and sort of provide you the information along the way. So that is we get more confident or less confident, you can go on the ride with us. And we may be able to get a little more specific when we're up here next year and we got another year of milestones behind us And when we'll be a little less stealthy about pharmaceutical packaging and hopefully, a little more progress in auto and iris and some of our next gen stuff and consumer electronics. But as soon as we can be more straightforward, we will.
I see someone else waving here. Great.
My name is Gary McCam, McCam Taylor and Company. Pittsburgh Corning, I believe, has come to a resolution and I think you're going to be recognizing that in the first half of this year. Is that correct?
So carry all the way through so I can aim the question at the right person.
Okay.
Because we've recognized almost all the accounting you've got to do with that old venture a long time ago. So let me hear your whole question and then My
whole question is, are you recognizing it the first half of this year as has been reported, number 1? And is that possibly going to all be in the Q1, which might explain why your outlook is so positive beginning with the Q2. Is there a connection?
So on Pittsburgh Corning, we're going to touch on I'll touch on 2 things. I may have one talk about where that is in the court case. I'll have our General Counsel address that if someone can get him a microphone. And then accounting wise, all of Pittsburgh Corning is behind this. So that's not a factor you see in our financials.
We've already accounted for what we expected the resolution to be. But General Counsel, this is Louis Stevenson. Would you like to address what's going on? Sure.
So the Pittsburgh Corning bankruptcy has there was an appeal. And the appeal has now been resolved. And so the plan will become effective in Q2. And then from our standpoint, there was an injunction, which I'm not if that's what you're referring to, but that injunction will be lifted in August of this year. From an accounting standpoint, as Wendell has said, that has all been taken care of.
So that has no impact, from an accounting standpoint. But from a legal standpoint, the bankruptcy is done. And everything that will become effective will become effective in Q2 of this year.
All right. Other questions to this side? I'm sorry. I didn't know you had a follow-up. I apologize.
I can't quite see you. So Yes. Yes. Correct. You got it.
Thank
you. Wamsi Mohan, Bank of America Merrill Lynch.
Thank you. The lights are bright. I'm not going blind, I don't think.
Two questions. One is just given the fact that LCD demand is sort of weak right now and there is excess inventory in the supply chain. How critical is a very strong Chinese New Year for that inventory to get absorbed and for 2Q to sequentially grow? And just more broadly, what are seeing as international demand trends? Maybe Eric can comment on that, specifically with respect to China.
And second question is, I know you mentioned that, you know, gorilla for autos, we should sort of not put that in our models yet. But as we think about putting in our models eventually, how should we think about the margin structure and that, especially given that last time Gorilla large scale deployments on TVs had a finishing process that impacted margins. And so given your JV structure here, how should we think about those margins as we go forward?
Terrific question. Let's start with the LCD market. And why don't you start, Mr. Clapin, and if Eric wants to add anything about China, he can. Okay.
In short, we're not expecting a major increase in the growth rate in China over Chinese New Year. It's always a good season. It's like the December season in the U. S. And but it's similar.
We're expecting similar rates of growth in China in that period as well as the full year as we experienced last year. So, yes, but went south that would be a problem, but nobody is anticipating that at this point.
Great. On our margin structure, I think you're asking a really astute question. So I think you should think about the base glass business that you heard from Marty, because what we're going to do is, we're going to manufacture the base glass, right? And then that in turn will go into a windshield manufacturer. Traditionally, the windshield manufacturers have very low margins and that we're going to participate in as a venture as well as will there'll just be other glazers who are our customers.
I think you should think about the base glass business is sort of being about the corporate average, right? It won't be quite as hot a margin structure as traditional gorilla. But in industrial terms, it will be really nicely attractive.
And you should note that it's not just windshield, but any opening in the car in general though, front sidelights, windshield, moonroofs in general.
Two quick questions. You guys are currently using the core in rate of 99%, which increased from 93% last year. When you did this core net income for the displacement segment declined by about 13%. I think the current yen rate is around 106%. If you adjusted that to the current yen rate today, what would core display earnings be?
So your question is, if we were to move our core rate that we have in at 99%, which reflects our hedges through 2017 to the hedge rate going forward that we just completed those out years of 106, that's what you're asking?
Isn't the blended hedge rate from 2016 to 2022, 106?
2017, yes. Yes, it
is 106. It's about $20,000,000 of NPAT for every 1 yen move on an annual basis.
So $140,000,000 Yes, dollars
140,000,000 But I think the important thing to keep in mind is that the hedges that we have in place for 2016, which we put in place a couple of years ago, are closer are at the average of $99,000,000 And that's why we haven't changed the core rate, but that is it's about $140,000,000 would be the difference.
So will the core rate change post 2016?
We'll make a decision on the core rate sometime after 2016, whether it will change in 2017 where we also had those 99 hedges in place or whether we'll wait to 2018. We haven't decided yet, but we'll certainly let people know when we do. Great.
And then last question. Just on the core display margins for Q4, I think there was about 1,000 basis point decline in the core display margins. Can you walk through kind of what drove that decline in the display margins?
Well, so I think if you go back and look at where we were in the Q4 from a display industry standpoint, we had both declines in volume, which is pretty unusual for us. And then we've got a very high fixed cost structure there. And so we did see some declines from a margin standpoint. And we expect that to increase as volumes increase in 2016. So I think we will get back to where we were from a margin standpoint.
And I think essentially starting in the Q2 when the volume picks up again.
Right. Now Eric, did you have something you wanted to add on China? You seem to be.
Yes. I was just going to complete the prior question there related to international. Corning has a very effective international organization, and that is especially true in China given the criticality of the China market really to all of our businesses. In 2015, they had a great year. In fact, it was overall a record year for our company in China.
And that was true in nearly every single business, Clark's Opto business, both of Jim's Gorilla and LCD business, my light duty vehicle business, Life Sciences and so forth. Really, the only negative that we saw in the market that is carrying actually into this year is in the China heavy duty market that I cited, experienced a 30% decline last year, and that was an impact on our performance.
Okay. Anne tells me it's the last question, so I'll end where I started in the middle.
Thanks. Joseph Woll from Barclays. A question for Clark. You gave a 0% to 2% CapEx rate for Optical Communications. And I'm wondering is that a core telco, does that include data center growth?
And when we think about the passive optical opportunity over the next couple of years, how much faster can you grow than the overall data center growth as well? Or what percentage of the data center build do you think Corning addresses?
Okay. So first I'll address the growth rates and then I'll address the percentage of data center question. The 0% to 2% is total telecom capex broadly defined, including enterprise applications and data centers. But we the way you should think about that is we expect that the passive optical portion of that growth is closer to 4%. So in a category growing 0 to 2 to 2%, the place we position is about 4%.
There are some places in the mix that are growing faster than that. Fiber to the home is growing about 5. Enterprise is growing about 8. Wireless, the optical portion of wireless growing about 10. So when you roll all that up, that's the reason we're expecting to grow mid single digits this year.
We'll grow faster than the sort of optical passive rate because we participate in some of those higher growth segments. The question around percentage of optical in data centers is we can handle that a number of different ways. The way I choose to think about it is, if you look at port count in data centers today, all new ports being installed, about 65% of those ports going into data centers are optical. And we expect by 2020, over 80% of the ports to be optical. So we're continuing to see a migration, if you will, in the application of connectivity in a data center from sort of traditional copper technologies to optical.
And we see a fairly rapid growth in that. That's coupled with about 11% growth in the core data center growth rate itself. So it's a pretty good growth environment for us.
Good. Well, with that, I'll say thank you to everyone. I have a few quick closing comments. I'm going to show you a video and then we're going to open up the display. I hope that what we've done here is give you a better understanding of our framework and what you can expect from us going forward.
To sum up, we're creating strong value. We're generating more than $20,000,000,000 through 2019. We will invest $10,000,000,000 to grow and sustain our leadership. We also plan to distribute more than $10,000,000,000 to our shareholders. We are beating our competition and we intend to keep beating them through innovation and lowest cost manufacturing.
We're focusing our portfolio to increase our probability of success, reduce the cost of innovation and increase the barriers to entry for our competition. As you heard today, we have a rich set of growth opportunities including several large disruptive innovations that could offer us new S curves and many, many years of secular growth. Finally, you can count on us to communicate our progress along the way. Although as I said earlier, disruptive innovations are notoriously difficult to predict, we'll keep you posted on both our successes as well as our disappointments as we pass milestones in our journey to create value and improve lives. And I just wanted to thank you for being on that journey with us.
Anne?
Okay. That ends the formal portion of our meeting. Now as Wendell said, we have a short video. It's going to give you a preview of what you can expect to see at the exciting exhibits that we have at the back. They'll be open until noon.
Today's speakers and additional business and technology leaders will meet you at the exhibits. We look forward to interacting with you and letting you engage with the glass age. Thank you.