IBM Buys 25% Stake in Corning Glass Subsidiary

IBM said Tuesday that it bought a 25% stake in PCO Inc., a Chatsworth subsidiary of Corning Glass Works that makes devices linking fiber-optics lines to computers, telephones and other equipment.

The move by IBM reflects efforts by the giant computer firm to greatly expand its use of fiber-optics technology in linking computers. The technology ultimately would allow computer users to transmit data further, faster, cheaper and in greater volume than is done now over conventional phone lines.

Fiber optics currently is primarily used in long-distance telephone lines. With the technology, signals are transmitted in the form of light waves through cables containing a fine glass fiber. PCO makes “opto-electronic” devices that convert electronic signals into light and vice versa.

The amount of money IBM invested in PCO was not disclosed. In addition, Corning Glass, based in Corning, N.Y., said it invested additional money in PCO, but also did not disclose the amount.

With the 25% stake sold to IBM, Corning Glass now owns 65% of PCO, with the remaining 10% owned largely by PCO founders. Corning previously owned 80%, with the founders holding the rest.

PCO was founded as PlessCor Optronics in 1984 by Michael K. Barnoski, a former research executive with TRW and Hughes Research, along with Corning Glass and Plessey Co., a British firm that sold its interest to Corning Glass in 1986. Barnoski declined to disclose financial details about PCO, but said annual sales exceed $15 million and that the company is profitable.

IBM, based in Armonk, N.Y., has frequently bought stakes in suppliers and in companies with which it is developing products. For example, IBM held a stake in Intel Corp., a Santa Clara semiconductor firm, from 1982 until 1987.