Corning Inc has developed a clean, razor thin glass that is sturdy enough to withstand everyday scratches -- a dazzling breakthrough that has done little for its bottom line.

But Corning's efforts could soon start paying off thanks to the explosive demand for touchscreen devices such as Motorola Inc's Droid phones and Samsung Electronic Co Ltd's Galaxy Tab that need tough, scratch-resistant glass.

Corning, known as Corning Glass Works until 1989, could use a hit. The company's shares are down more than 3 percent this year and analysts worry about the future of its biggest business: liquid crystal display, a thin, electronic display used in computer monitors and in other panels.

The problem is LCD is also widely used in flat screen TVs -- and consumers have shown little appetite lately for TV sets with all the latest bells and whistles.

Enter Gorilla Glass, which scientists starting developing in 2006 after drawing on breakthroughs from a 1960 project called Project Muscle. Corning is betting Gorilla Glass can diversify its business -- giving it a hedge against a fading LCD market -- and make the company a supplier for a new range of consumer devices.

Corning need a new growth driver and I think Gorilla will be that growth driver, said UBS analyst Nikos Theodosopoulos.

Corning, which produced the windows for some of the earliest spacecraft and invented Pyrex glass during the course of its 159 years of existence, has launched a new ad campaign for the glass, touted it on conference calls and made clear it expects the business to ramp up quickly.

It says sales of the glass could double next year to $800 million.

One analyst, Yair Reiner of Oppenheimer & Co, estimates Gorilla Glass will make up 13 percent of Corning's $7.5 billion sales next year and between 5 percent and 7 percent of its profit.

Jim Steiner, head of Corning's specialty materials division, said a major reason for the growth projections is the expanding smartphone and tablet markets.

It is widely believed that Gorilla Glass is a component in Apple Inc's iPhones and iPads, even though neither company would confirm it. And Corning is betting that demand for its glass will get a bump as other companies such as Acer Inc and Dell Inc release rival tablets.

We believe a high percent (of tablets) will have cover glass, Steiner said.

But Gorilla Glass' future still depends on TVs because they require more glass than pocket devices. Steiner said TVs covered by Gorilla Glass will appear next year.

Wall Street is waiting to see whether TV manufacturers include the glass in designs to give the sets greater durability and a sleeker look. That would represent a potentially huge market for the new material, even if TV sales dwindle, since Gorilla Glass is starting from zero market share. Ten years ago, Corning's LCD business was about the same size as Gorilla Glass, with most of its profit coming from components for the telecommunications industry.

Gorilla is just like LCD when it started out as 5 percent of sales and then ramped and became a massive product, said Theodosopoulos.

And while investors still expect Corning shares to be closely tied to the fortunes of the LCD business, that could be changing soon, says Kendall Anderson of Anderson Griggs Portfolio Management, which has funds that hold Corning shares.

For Corning, the growth story is three to five years and I've got confidence in Gorilla Glass, Anderson says.

(Reporting by Liana B. Baker; editing by Paul Thomasch and Andre Grenon)