Applied Materials: Burned By The Sun

By Eric Savitz
barrons.com

Applied Materials (AMAT) yesterday afternoon posted stellar results for the fiscal fourth quarter ended October 25; revenue of $1.53 billion was well ahead of the Street at $1.32 billion, and non-GAAP EPS of 13 cents a share crushed the consensus number at three cents. Likewise, the company said FY Q1 revenue would be up 10%-25% sequentially, which implies $1.68 billion to $1.91 billion, smartly above the Street consensus at $1.4 billion.

As I noted yesterday, CEO Michael Splinter said on the call that he expects the chip industry to spend $18 to $20 billion on capital equipment in 2010, up from $12 billion to $13 billion this year; at the mid-point, that would be an increase of 52%, which while off a nightmarish bottom, is still nice growth.

Splinter also said the company itself will grow revenue at least 30% for the year, which implies revenue of at least $6.5 billion, above the Street at $6.2 billion.

The company also announced plans to cut up to 1,500 jobs.

Investors love beat-and-raise quarters. And they adore headcount reductions. But the stock today took a hit, falling 43 cents, or 3.3%, to $12.82. So what happened?

Well, here’s the problem. If AMAT, the premier provider of semiconductor capital equipment, expects the market for its core business segment to be up 50%, why is forecasting revenue growth of 30%?

I’ll tell you why: because the company is still struggling in the solar sector. Splinter said the semi cap segment should grow at least 40% next year, which is just a matter of math: if you assume a market of $13 billion this year, and $18 billion next year, you get 38.5% growth; throw in some market share gains, and you get growth of at least 40%. If the middle of the range is more likely, then he is low-balling the potential growth. But he also said that the company’s solar business would be in a range of plus-or-minus 10% next year. Splinter said the company should see some growth in the thin-film solar segment, but that troubles remain in the capacity-glutted crystalline silicon solar business.

In short, the solar sector was supposed to provide AMAT with a way to diversify, and make the company less sensitive to swings in the semiconductor cycle. But instead, it has turned the company into a solar play right at the moment when demand for semi cap equipment is picking up. Ergo, the analysts aren’t too keen on the stock.

* Caris & Co. analyst Ben Pang, who has an Average rating on the stock, asserts in a note today that EES, the company’s energy and environment solutions unit, which includes solar, “will probably need to provide a better growth profile” for AMAT’s multiple to expand. He advises betting on Lam Research (LRCX) for a pick up in memory spending, or Cymer (CYMI), as a bet on lithography.
* Pacific Crest’s Weston Twigg, who rates the stock Sector Perform, likewise writes that “the guidance fails to inspire confidence that solar will provide a revenue growth stream for the company,” adding that no growth in the division in FY 2010 “is likely to be viewed as a huge disappointment.”
* FBR Capital’s Mehdi Hosseini has the same concerns. “We remain cautious on overall solar-related bookings/revenues until the overall solar-related demand picture improves,” he writes. Hosseini rates the stock Market Perform.
* Raj Seth, analyst at Cowen, has another worry: He says the semi equipment group will need to see the memory sector begin to build capacity again to get to the “next level,” and says that the PC cycle and holiday selling season will remain “critical.” He stays Neutral on the stock.
* Bank of America/Merrill Lynch analyst Krish Sankar also stays Neutral, and points out that the company’s FY 2010 growth outlook looks “muted” compared to others in the semi equipment group, due to the struggles in solar.

So there you have it: the big diversification move into solar is holding AMAT back.

European renewables bank on 2010 as demand looks up

Thu Nov 12, 2009 2:00pm EST

* Q-Cells, Conergy see 2010 profit despite quarterly losses

* Phoenix Solar cuts 2009 sales outlook, sees profit next yr

* Acciona to install 100 MW in solar, 400 MW in wind in 2010

* Gamesa sees business picking up in Q4 2009

* Q-Cells, Phoenix, Conergy shares close 3.6-6.3 pct lower

* Acciona shares close up 1 pct

By Christoph Steitz and Jonathan Gleave

FRANKFURT/MADRID, Nov 12 (Reuters) – European renewable companies posted moderate to sharp declines in quarterly results but sounded more upbeat for 2010, as costs cuts and an expected pickup in demand help lift profits after a year of turmoil.

Three of Germany’s top solar energy companies said they expected to either return to or grow profits next year following a year of weak economic demand, reduced government subsidies and bruising price competition from low-cost Asian rivals.

The two biggest — Q-Cells, among the world’s largest solar cell makers, and Conergy– aim for a 2010 operating profit.

Still, both companies posted large quarterly net losses, with Q-Cells, a supplier of cells and module components to commercial customers, losing nearly a quarter of a billion euros.

Solar equipment wholesaler Phoenix Solar, which like Conergy, installs residential solar roof panels, posted a small third-quarter net profit, but cut its 2009 outlook due to delays in the financing of solar power plants.

Applied Materials sees turnaround but cuts jobs

Wed Nov 11, 2009 7:47pm EST

* Q4 10 cents/share vs 3 cents/share estimate

* Says to slash up to 1,500 jobs, cut costs in fiscal 2010

* Seeing early signs of turnaround in chip business

By Poornima Gupta

SAN FRANCISCO, Nov 11 (Reuters) – Applied Materials Inc (AMAT), the world’s largest producer of chip-making gear, said on Wednesday that its microchip business was starting to turn around and posted its first quarterly profit in a year, but it plans to cut as much as 12 percent of its workforce.

Stung by a severe decline in the sales of its core semiconductor manufacturing equipment, Applied Materials has moved aggressively into solar equipment to spur growth. But that market has also been pinched by the economic downturn.

Looking forward, the company expects net sales to increase 30 percent in fiscal 2010 and estimated earnings for the first quarter of between 4 cents and 8 cents per share, including restructuring charges. Analysts on average forecast a profit of 6 cents a share for the first quarter, according to Thomson Reuters I/B/E/S.

Applied Materials Chief Executive Mike Splinter also said the company saw improvement in the solar photovoltaic market during the fourth quarter, with module price decline slowing and financing opportunities gradually improving.

Germany remained a “bright spot” in the crystalline silicon rooftop solar market and China a growing area for such products, Splinter said.

But he added that near-term market conditions were challenging for the company’s thin-film photovoltaic customers.

“In calendar 2010, we expect worldwide solar PV installations to be up over 40 percent, with solar representing one of Applied’s key growth opportunities over the next several years,” Splinter said.

Applied Materials Announces Solid Fourth Quarter Results

* Returns to profitability in Q4 led by semiconductor equipment business
* New operating structure to strengthen leadership in global markets and deliver an anticipated $450 million in cost reductions
* Expects net sales to grow by more than 30 percent in fiscal 2010

4:03 pm EST, Wednesday November 11, 2009

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) today reported fiscal 2009 fourth quarter net sales of $1.53 billion and GAAP net income of $138 million or $0.10 per share. For its fiscal year ended Oct. 25, 2009, the company reported net sales of $5.01 billion and a GAAP net loss of $305 million or $0.23 per share.

The company also reported non-GAAP results, with fourth quarter net income of $177 million or $0.13 per share and fiscal year net income of $37 million or $0.03 per share.

“Applied delivered a solid fourth quarter led by increased net sales and profitability in our semiconductor equipment business, with improved demand and financial performance in all of our segments,” said Mike Splinter, chairman and CEO. “For the year, we invested in growth across all of our businesses, introducing new products and expanding into new markets while reducing our cost structure.”

Applied Materials was named the number one equipment supplier to the solar PV industry during 2009 and recently opened the world’s largest non-governmental solar energy research facility in Xi’an, China. Applied’s Energy and Environmental Solutions business has grown to over a billion dollars in annual net sales in less than three years and is expected to achieve breakeven or better results in fiscal 2010 on a non-GAAP basis.

“Since 2006, Applied has successfully extended our nanomanufacturing leadership from semiconductor and display to the solar industry, and during that time we have seen changes in customer and geographic concentration in all of these markets,” Splinter added. “We are adapting our operating structure to align with these changes and enhance the value we provide to our customers and stockholders.”

Thin-film share of solar market to double – report

Tue Nov 10, 2009 5:06pm EST

* Thin film to account for 31 pct of solar panels in 2013

* Technology had 14 pct market share in 2008

* Research says First Solar established market viability

LOS ANGELES, Nov 10 (Reuters) – Solar panels that use thin-film technology in place of traditional silicon-based materials will more than double their share of the solar panel market by 2013, according to a report issued on Tuesday by industry research firm iSuppli.

Thin-film panels, such as those made by First Solar Inc (FSLR), the largest U.S. solar power company, are cheaper to make per watt of electricity than are standard panels.

The average thin-film solar panel price is expected to decline nearly 18 percent in 2010 to $1.40 per watt, iSuppli said. Average prices for silicon-based panels are expected to drop 20 percent to $2.00 per watt in 2010.

Panels than employ thin-film technology are expected to claim 31 percent of the global solar panel market by 2013, up from 14 percent in 2008.

“The market viability of thin film has been solidly established by First Solar Inc as it rockets to become the world’s top solar panel maker this year, with more than a gigawatt of production,” said Greg Sheppard, chief research officer for iSuppli in a statement.

Most solar panels, like those made by Suntech Power Holdings Co Ltd (STP) and California-based SunPower Corp (SPWRA, SPWRB), rely on polysilicon as a key raw material, while thin-film panel makers use a variety of different materials to turn sunlight into electricity.

Sheppard added that First Solar has driven its cost of production to less than 90 cents per watt, keeping its costs at about half the level of its competitors that use silicon-based technology.

Thin-film panels’ cost advantage has helped attract Japan’s Sharp Corp to expand into the thin film market. Solar equipment suppliers, such as Applied Materials Inc (AMAT) and Swiss technology group Oerlikon’s solar arm, are ramping up in thin-film space as well.

(Reporting by Laura Isensee; Editing by Steve Orlofsky)

Applied Materials Acquires the Assets of Advent Solar

1:30 pm EST, Friday November 6, 2009

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT), the leading supplier of equipment and services to the solar photovoltaic (PV) industry, announced today that it has acquired substantially all the assets, including the intellectual property, of Advent Solar, Inc. for an undisclosed cash amount. Advent Solar is a developer of advanced technology for crystalline silicon (c-Si) PVs. This acquisition is expected to complement Applied’s portfolio of solar PV technologies and enhance its leadership in the c-Si equipment market.

Advent Solar has pioneered several innovations for producing c-Si cells and modules, including technology for streamlining module assembly processes and advanced efficiency device architectures. The company, founded in 2002, is headquartered in Albuquerque, New Mexico.

“We believe the acquisition of Advent Solar will increase our opportunities to provide innovative solutions for reducing module production costs,” said Dr. Mark Pinto, chief technology officer and general manager of Applied’s Energy and Environmental Solutions Group. “Combining Advent Solar’s PV technology with Applied’s expertise in automated wafering and cell production equipment, we expect to deliver systems that will enhance customers’ c-Si roadmaps and accelerate the reduction in cost per watt of solar electricity.”

After the close of this transaction, Advent Solar’s assets will be integrated with Applied’s Energy and Environmental Solutions Group.

Applied Materials’ Next-Generation IEC-Certified SunFab Module Technology Cuts Customers’ Cost of Manufacturing

11:00 am EDT, Wednesday October 28, 2009

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) announced today that it has significantly lowered the cost for customers to manufacture solar photovoltaic (PV) panels on its SunFab™ Thin Film Line using its next-generation module technology. Executing on its aggressive cost-cutting roadmap, Applied has leveraged economies of scale with leading suppliers and has introduced key process efficiencies that reduce the cost of materials by 22%. In addition, SunFab panels using these new materials and processes have received IEC* certification for aperture area conversion efficiencies of up to 9.7%, enabling customers to advance panel performance to this level without requiring additional certification.

“This achievement demonstrates Applied’s ongoing commitment to reducing the cost of manufacturing panels with our SunFab Thin Film Line to $1/watt and below,” said Tom Lacey, vice president and general manager of Applied Materials’ SunFab Thin Film Solar Group. “Applied Materials has a unique ability to accelerate solar PV through its 5.7m2 panel size standard, innovative technology and line performance improvements, and also through its expanding global SunFab footprint that enables economies of scale by aggregating the needs of multiple customers.”

In order to achieve these cost reductions, Applied worked with leading, high-quality materials suppliers on behalf of its customers to secure lower pricing in key raw materials such as transparent conductive glass and laminating films. Applied also engineered and validated more efficient processes that significantly decrease materials consumption.

Applied’s receipt of advance IEC certification for panels produced on SunFab lines using this next-generation module package of materials and process changes will help accelerate customers’ time to market for their new panels. The IEC certification was awarded to both single and tandem junction modules in all panel sizes by TÜV InterCert, demonstrating that, like the original SunFab panels, modules produced with this next-generation technology can meet performance and safety specifications under challenging environmental conditions.

Applied Materials Opens Advanced Solar Research and Customer Demonstration Facility in Xi’an, China

10:00 am EDT, Monday October 26, 2009

XI’AN, China–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) the world’s largest supplier of equipment to the solar photovoltaic industry, today opened an advanced solar research and demonstration facility in Xi’an, China. Applied Materials’ Solar Technology Center, the largest non-government solar energy research facility in the world, is comprised of laboratory and office buildings covering more than 400,000 square feet and contains an entire Applied SunFab™ thin film manufacturing line and a complete crystalline silicon pilot process. These lines are configured to closely simulate customer fabrication (fab) environments.

“This opening represents a critical breakthrough for the photovoltaic industry and China and a tremendous benefit to our customers,” said Mike Splinter, chairman and CEO of Applied Materials. “Establishing this center in China is an integral part of Applied’s global strategy and an important step toward the industrialization of the global solar industry.”

Applied Materials is celebrating its 25th anniversary in China this year and today has more than 800 employees and 13 offices in the country, with approximately 300 employees in Xi’an. Applied first broke ground in Xi’an in 2006 and the total investment in the multi-phase project is more than $250 million dollars. The completed facility includes a solar technology center for R&D, engineering, product demonstration, testing and training for crystalline silicon and thin film solar module manufacturing equipment and processes. Employees in the center will work closely with local suppliers to test and qualify new materials and tools and evaluate potential new cost saving technologies. The center has the largest solar array in Xi’an, a 56 kW array on a parking lot structure.

“We believe this technology center will provide important contributions to driving down the cost of solar around the world,” stated Mark Pinto, senior vice president, general manager, Energy and Environmental Solutions and Applied’s chief technology officer. “In addition to housing Applied’s state-of-the-art research into solar manufacturing techniques, customers and potential customers from around the world will be able to work side-by-side with our technologists to reduce their time to market and improve factory productivity and cell efficiency.”

Xi’an is located in the Shaanxi province in northwest China and is a growing center of energy technology excellence in China. The local province boasts more than 40 colleges and universities and Xi’an is recognized as one of the leading high-technology research areas in the country. Applied has worked closely with local governments, contributed to research and awarded 166 university scholarships since 2005 through an R&D fund with the Xi’an Municipal Science and Technology Commission and Xi’an High Tech Park.

“As China works to build its renewable power infrastructure we are pleased to offer such a unique facility. In the laboratories, local suppliers of systems and materials will be able to work closely with our engineers to reduce development costs, accelerate the industrialization of clean energy technology and contribute to decreasing the cost of solar,” said Charlie Gay, president, Applied Solar. “This is a powerful benefit we are bringing to our customers and to China, and we look forward to immediately putting these capabilities to work.”

MEMC To Acquire SunEdison; Posts Q3 Loss; Stock Falls

By Eric Savitz
barrons.com

In a major diversification move, polysilicon producer MEMC Electronic Materials (WFR) this afternoon said it will acquire SunEdison for at least $200 million in cash and stock.

SunEdison, which developers, finances, owns and operates solar projects, has about 300 employees. Investors in the company include Goldman Sachs, MissionPoint Capital Partners, Black River Asset Management, Greylock Partners, HSH Nordbank and Applied Materials (AMAT).

Terms call for MEMC to pay the $200 million purchase price 70% in cash and 30% in stock; the deal also includes a provision for an earn out of up to $89 million, based on certain performance targets. The company is also paying $17 million in retention payments to certain SunEdison employees, plus up to another $34 million in stock, subject to performance criteria and vesting. MEMC will also assume SunEdison’s net debt.

MEMC said the deal should be accretive to earnings by the second half of 2010.

Meanwhile, MEMC posted Q3 revenue of $310 million, ahead of the Street consensus of $301.6 million. The company suffered a loss in the quarter of $64.6 million, or 29 cents a share, due in part to a $39.7 million restructuring and impairment charge, a $19.2 million tax-related item and $6.3 million hit for a reduction inthe value of the company’s Suntech (STP) warrants.

For Q4, the company sees revenue of $310 million to $350 million; the midpont of the range at $330 million is below the previous Street consensus at $341.6 million.

In late trading, WFR fell 58 cents, or 3.8%, to $14.85.

Motech Selects Applied Baccini Esatto Technology for Double Printing of Solar Cells

8:00 pm EDT, Tuesday October 20, 2009

TAINAN, Taiwan–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) announced today that Motech Solar, one of the world’s leading producers of crystalline silicon (c-Si) solar cells, has installed and qualified an Applied Baccini back-end line for double printing applications at its volume production facility in Tainan, Taiwan. Applied’s recently announced Esatto Technology™ on the Baccini® system will be used to manufacture Motech Solar’s new c-Si solar cell design.

Dr. Kuo En Chang, president of Motech’s Solar Division, stated, “We’ve successfully used Baccini systems for cell production for five years. We recently installed Baccini’s new Esatto Technology for double printing our new cell architecture and have had outstanding results. As a long term collaborator with Applied Baccini, we look forward to continuing our close relationship for future development.”

“We are pleased to be collaborating with Motech to further optimize the solar cell configurations in their technology roadmap,” said Davide Spotti, vice president and general manager of Applied’s Baccini Cell Systems. “Our Esatto Technology has been specifically designed for multiple printing applications and incorporates numerous proprietary hardware and software innovations, including the integration of high resolution imaging, screen alignment and advanced process control. Baccini’s systems solution, using the Esatto Technology platform, provides a unique capability to help Motech and other customers upgrade Baccini lines to rapidly transition advanced cell designs to full scale production and market acceptance.”

Motech Solar, a division of Motech Industries, Inc. (Motech), was created in 1997 and is headquartered in Tainan Science Park, Taiwan. In 2000, Motech became the first company in Taiwan to manufacture crystalline silicon solar cells. The company specializes in the R&D, manufacturing, marketing and sales of monocrystalline and multicrystalline silicon cells. To obtain the highest efficiency solar cells as possible, Motech Solar uses the latest technology and equipment to process silicon wafers. With hard work and dedication, Motech Solar became the 8th largest producer of crystalline silicon solar cells in the world. Visit our website at www.motech.com.tw.

Energy Conversion Devices Spikes On Takeover Rumors

By Eric Savitz
barrons.com

Energy Conversion Devices (ENER) shares are sharply higher amid takeover speculation. I’d note that takeover rumors on the solar products company crop up with some regularity; the last round of chatter, about a month ago, involved theoretical interest in the company from Applied Materials (AMAT).

I didn’t buy the AMAT rumors, and I wouldn’t hold out a lot of hope that there’s anything real this time, either.

ENER today is up $1.93, or 17.7%, to $12.82.

KSK Surya Photovoltaic Venture Selects Applied Materials’ SunFab Solar Panel Production Lines for 150MW Project in India

Wednesday October 7, 2009, 10:30 pm EDT

HYDERABAD, India–(BUSINESS WIRE)–KSK Surya Photovoltaic Venture, Private Limited (KSK), a subsidiary of KSK Power Ventur plc, a leading independent power provider in India, announced today that it has signed a contract with Applied Materials, Inc. (AMAT) to purchase two Applied SunFab™ Thin Film Lines for manufacturing high-power output 5.7m2 solar panels. The SunFab lines will be installed in a state-of-the-art facility, including an R&D center, which KSK plans to build in the “Fab City” located in Hyderabad, India, at a total project cost (including land and buildings) of approximately USD $500 million.

When completed, the annual capacity of KSK’s facility is expected to be about 150MW, making it the largest solar photovoltaic (PV) factory in India. Using Applied Materials’ advanced tandem junction technology, each 5.7m2 SunFab panel will have a power output greater than 500Wp.

Mr. T.L. Sankar, KSK Group Chairman, stated, “Since India receives among the highest amount of solar radiation in the world, it must become a leader in solar power-generation technology. Our alliance with Applied Materials will help KSK play a significant part in India’s new Solar Mission to build 20GW of solar power by 2020.” Mr. S. Kishore, Executive Director of KSK, said, “The large, powerful, tandem junction panels from our SunFab lines will enable us to quickly build our PV capacity and supply clean, renewable energy at an affordable cost.” Mr. K.A. Sastry, Executive Director, added that KSK intends to apply its power generation experience to system integration and development of solar farms selling energy into the grid.

“KSK’s selection of Applied’s SunFab production lines and service solution is a strong testament to the value proposition we offer to utility-scale power providers, affirming the manufacturing readiness of our 5.7m2 tandem junction technology and the confidence in our roadmap,” said Dr. Mark Pinto, senior vice president and general manager of Applied’s Energy and Environmental Solutions Group. “The fully integrated SunFab lines will enable KSK to rapidly and cost-effectively deploy solar farms to meet India’s fast-growing, energy needs.”

KSK also signed a service contract with Applied Materials covering the first five years of production. Applied Materials will support KSK’s lines with preventive and corrective maintenance, spare parts and other services to optimize equipment performance and maximize manufacturing output. In addition, Applied and KSK will work together to develop continuous improvement programs that aim to increase module efficiency and lower operating costs.

“We believe that thin film silicon is the best solar module technology for conditions on the ground in India,” said Mr. Anil Kutty, Managing Director of KSK Surya Photovoltaic Venture, Private Limited. “Compared to crystalline silicon technologies, our SunFab thin film modules will be capable of producing more power at high ambient temperatures and under diffused light, maximizing the energy yield from our future solar farms.”

Dr. Ravinder Kachru, Chief Executive Officer, and Dr. S. Rao Peddada, Chief Operating Officer of KSK Surya Photovoltaic Venture, Private Limited, said, “We are excited about bringing the advanced thin film panel manufacturing technology to India and working with Applied Materials in developing next generation thin film PV technology.”

KSK Power Ventur plc, the ultimate holding company of the KSK Group, is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and is a leading developer and operator of power plants in India and has initiated efforts on mineral and solar businesses for wider footprint in the energy value chain. The main subsidiary company, KSK Energy Ventures, is currently operating /implementing projects in excess of 4500 MW. Learn more at www.ksk.co.in

Applied Materials Statement on The Clean Energy Jobs and American Power Act

Wednesday September 30, 2009, 10:53 pm EDT

WASHINGTON–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) the world’s largest supplier of equipment to the solar industry, released the following statement in support of the “The Clean Energy Jobs and American Power Act,” a bill introduced today by Senator John Kerry and Senator Barbara Boxer.

“This is a good step toward a final package of environmental legislation that will enable the United States to maintain its technology competitiveness, create green jobs, and achieve significant reductions in greenhouse gases,” said Mike Splinter, Chairman and CEO of Applied Materials.

“It is important for people to realize that solar-generated energy is the best pathway to achieve the goals of this bill. If we can combine this thinking on climate change with aggressive renewable energy standards and tax incentives for domestic manufacturing, the U.S. can create an effective solution to the two great challenges of our time, energy and the environment.”

“There is good momentum now, with the Senate moving to follow up on the House of Representatives’ action earlier this year, and both working aggressively to support President Obama’s vision to establish the United States’ leadership in renewable energy and climate change. With all that is at stake, we urge Congress to work together in a bipartisan way to get a bill on the President’s desk that he can sign soon, knowing it is the right thing for our country.”

China: From Clean-Energy Producer to Clean-Energy Consumer

By Keith Johnson

When it comes to China and clean energy, so much of the hand-wringing in the West, and especially in the U.S., hinges on China’s role as a producer of clean-tech gear. That’s true for everything from batteries for electric cars to wind turbines to solar panels.

Yet the real story might not be so much China’s global arrival as a maker of clean-tech stuff as a clean-energy consumer.

Take Applied Materials (AMAT), which makes computer chips and solar panels. Mark Pinto, the head of the company’s solar unit, told The Wall Street Journal that Beijing’s clean-energy push will drive China past Germany and the U.S. to become the largest consumer of solar power in the world “in the next two years.”

Part of that transformation is already underway. First Solar’s (FSLR) deal to build a 2-gigawatt solar-power installation in China was a coming-of-age moment both for the industry and the country. And as big as First Solar’s planned plant is, Chinese officials expect to add another 2 gigawatts to that same renewable-energy park. That single project has more solar power—on paper—than the entire U.S.

The growth in Chinese consumption of clean energy contrasts with the government’s plans to slow down the production of some clean-energy gear. Today, as expected, Chinese officials laid out new guidelines to throttle back industrial capacity in wind turbines and silicon used for solar panels, as well as traditional sectors such as aluminum, steel, and cement.

So for Western clean-energy companies, China will very much continue to be part of the equation—but not just as low-cost competition. The Chinese market will become the real clean-energy battleground.

That may not happen overnight—even with the industrial slowdown, China has enough domestic production capacity to meet its own clean-energy needs. As Clean Tech Insight notes, China exports 98% of its solar-panel production, leaving it plenty of capacity to feed a growing solar market at home.

Longer term, though, China’s need for state-of-the art clean technology—one of the reasons it tapped First Solar–will open up a potentially huge market. Then, all Western clean-tech firms will have to worry about are simmerings of protectionism and learning how to navigate ever-shifting government rules to promote clean energy.

Applied Materials upgraded on coming SunFab orders

Applied Materials upgraded on coming orders for solar production equipment, MEMC downgraded

Monday September 28, 2009, 12:36 pm EDT

PHILADELPHIA (AP) — Shares of Applied Materials Inc. (AMAT) advanced on Monday after a Citigroup analyst upgraded his recommendation on the stock based on “significant” upcoming orders for its solar modules production equipment.

Analyst Timothy Arcuri raised Applied Materials, a maker of chip production equipment, to “Buy” from “Hold” and added the stock to Citi’s top picks list for investors, replacing MEMC Electronic Materials Inc (WFR). He also raised his Applied Materials target price by $2 to $17 and bumped up his 2010 earnings estimate by 4 cents to 46 cents per share.

Wall Street analysts expect 2010 earnings of 33 cents per share, according to a poll by Thomson Reuters.

Arcuri said checks at the Hamburg solar show led him to believe that Applied Materials is about to sign a “significant” second wave of orders for its SunFab solar production equipment, including four new lines of about 300 megawatts in India.

While the analyst noted that SunFab’s long-term success isn’t certain given that module prices are falling in the market, the company is adding new customers, cutting costs, lined up about $1 billion in savings and has a renewed focus on regaining market share. These factors are enough to drive the stock higher, Arcuri said in a research note.

As the largest solar equipment provider, Applied Materials also will benefit from market growth in 2010 and sidestep the problem of weakened pricing.

“As these catalysts play out, the Street will no longer be able to ignore the stock,” Arcuri said.

Shares of Santa Clara, Calif.-based Applied Materials rose 42 cents, or 3.2 percent, to $13.52, in midday trading.

While Applied Materials got kudos, the analyst was bearish on silicon wafer maker MEMC, which he downgraded to “Hold” from “Buy.” He cut his target price to $20 from $24. He said the company’s polysilicon production problems still are unresolved, thereby risking missing seasonal demand and could lead to its missing this quarter’s financial outlook.

Earlier this month, MEMC reduced its third-quarter revenue forecast due to a disruption at a polysilicon Texas plant caused by equipment failure. The failed equipment was replaced but new problems delayed production again.

Arcuri slashed his 2010 earnings estimate for MEMC to 73 cents per share from $1.33, and to $1.56 from $2.82 in 2011. Analysts expect the company to post a profit of 98 cents per share in 2010, and $1.86 per share in 2011.

Shares of St. Peters, Mo.-based MEMC dropped 55 cents, or 3.2 percent, to $16.75.

Applied Materials Awarded Multi-Year Service Contract from ENN Solar Energy

Tuesday September 22, 2009, 7:30 am EDT

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) announced today that it has signed a five-year contract with ENN Solar Energy Co., Ltd. to support ENN’s solar photovoltaic (PV) module manufacturing facility in Langfang, China, which features an Applied SunFab™ Thin Film Line. Through its highly flexible SunFab™ Performance Service program, Applied will provide ENN with continuous operating cost reductions while enabling optimal performance from the SunFab™ production line at a predictable cost that scales with factory loading. Applied’s SunFab Performance Service program has been selected by all of Applied’s customers currently producing single and tandem junction modules on SunFab lines.

“ENN sees joining with Applied Global Services as a powerful strategy to optimize the return on our investment in our SunFab line,” said Dr. Rick Wan, General Manager of ENN Solar. “This agreement will allow us to replace much of our fixed cost infrastructure with a variable alternative that can flex as the market changes. This flexibility will free us to focus on successfully delivering high-performance, low-cost modules to our customers, helping them win in the marketplace.”

“We believe the combination of the revolutionary SunFab Thin Film Line and SunFab Performance Service delivers the fastest path to the lowest cost-per-watt and maximized megawatt output,” said Charlie Pappis, vice president and general manager of Applied Global Services. “The fact that all of our SunFab customers producing modules have selected SunFab Performance Service for ongoing support is a strong testament to the value proposition we offer.”

Under the agreement, Applied will leverage its dedicated, world-class service infrastructure to provide ENN’s SunFab Thin Film Line with preventive and corrective maintenance, spare parts management, and analytical services. Using an unmatched range of engineering, logistics and automation software technologies, highly experienced local support experts will optimize equipment performance, maximize manufacturing output and assure consistent cell characteristics. In addition, Applied and ENN will work together to develop continuous improvement programs that aim to increase module efficiency and lower operating costs.

ENN Solar Energy – a member of ENN Group – is a leader in the manufacturing of large-size thin film module products. The company produces and markets high performance silicon thin film modules of up to 5.7m2 per panel at low cost. Focusing on technology innovation and the environmental improvement, ENN Solar’s mission is to make clean renewable energy more affordable and available worldwide. Learn more at www.ennsolar.com.

Applied Materials sees solar unit profit in 2010

Mon Sep 21, 2009 3:21pm EDT

SAN FRANCISCO, Sept 21 (Reuters) – Applied Materials Inc (AMAT) said on Monday it plans to improve efficiency to cut the cost of producing solar panels below $1 per watt in three years and is on track to post profits at its environmental unit next year.

The world’s largest producer of chipmaking gear also said it is seeing “substantial progress in the global industrialization of the solar industry.”

“We continue to make progress in every aspect of the SunFab lines and are well on our way to delivering 10 percent efficient SunFab panels and $1 per watt production costs in 2010,” said Mark Pinto, chief technology officer and general manager of Applied’s Energy and Environmental Solutions group, which includes solar.

Pinto, whose remarks at an industry conference in Germany were released to the media, also laid out plans for SunFab panels with 12 percent conversion efficiency and module costs below 70 cents per watt by 2012.

Conversion efficiency is the amount of sunlight that can be turned into electricity.

Applied Materials is relying on its solar equipment arm to bolster sales and growth as its traditional chip business falters.

Applied Materials’s SunFab line of equipment anchors the thin-film photovoltaic portion of its business. Thin-film equipment, a crucial segment of the burgeoning solar equipment market, has been walloped by tightening credit and cutbacks in some government subsidies.

Thin-film panels are less efficient than crystalline at converting sunlight into electricity but are typically cheaper to manufacture because they use less silicon.

Applied Materials Dramatically Reduces Cost and Increases Productivity of Solar Ingot Squaring with New HCT Diamond Squarer System

Monday September 21, 2009, 2:48 pm EDT

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) today extended its leadership in pioneering solar wafering technology with its new Applied HCT Diamond Squarer™ system. This innovative new system can reduce the cost of squaring silicon ingots by up to one-third while offering at least twice the cutting speed of conventional squaring processes. Key to the HCT Diamond Squarer’s high performance is its novel diamond wire technology that eliminates the need for abrasive slurry and cuts electricity consumption in half. The compelling benefits of diamond wire are also available for Applied’s currently-installed HCT Squarer systems as a cost-effective, easily deployable upgrade kit.

In the conventional squaring process, a rapidly moving wire, carrying abrasive slurry, is used to cut monocrystalline or multi-crystalline silicon ingots into standard size bricks which are then sliced into wafers for photovoltaic (PV) applications. The HCT Diamond Squarer system uses diamond particles bonded to a metallic wire core to cut the ingot faster. In addition to increasing machine capacity and lowering energy consumption, this technology simplifies the squaring process by eliminating the complexity and expense of slurry management.

The performance of the new HCT diamond wire process has been validated by multiple customers. Maxim Vediankin, general director at high-quality wafer producer Silicio Solar, commented, “We are very impressed with HCT’s Diamond Squarer technology since it doubled our solar ingot squaring capacity. We’ve also seen a 50% reduction in energy use – which is vital to our roadmap for reducing the carbon footprint of our wafering operations.”

“We are continuously working on advanced technologies such as diamond wire to drive down the cost-per-watt of solar electricity,” said Jean-Maurice Imbert, general manager of Applied Materials’ Precision Wafering Systems division. “Integration of the squarer and the diamond wire is critical, requiring an in-depth understanding of the interaction between the two components to optimize the process and environmental advantages.”

The Applied HCT Diamond Squarer system is the latest addition to Applied’s production-proven suite of solutions for manufacturing silicon wafers for solar PV cells, which includes the market-leading Applied HCT MaxEdge™ wire saw for slicing ingots into ultra-thin wafers. For more information, visit http://www.appliedmaterials.com/products/solar_crystal_precision_wafer_sys_3.html.

Applied Materials shares decline after analyst downgrades to ‘Average’

Monday September 21, 2009, 12:23 pm EDT

SAN FRANCISCO (AP) — Applied Materials Inc. (AMAT) shares declined Monday after a Caris & Co. analyst downgraded the stock to “Average,” saying management changes indicate it is having trouble gaining share in the semiconductor equipment market.

Shares of Applied Materials, which makes equipment for the production of semiconductors, fell 45 cents, or 3.5 percent, to $12.58.

In a note to investors Monday, Caris analyst Ben Pang lowered his rating from “Buy” and cut his price target by $2 to $14.

Pang said the company’s recently announced management reorganization, which included Randhir Thakur replacing Tom St. Dennis as head of the silicon systems group, indicate “poor market share for semi equipment.”

“We think this could cause revenues to rebound slower than expected because semi capital spending is the key growth avenue over the next several quarters,” he said.

He believes the company is having trouble gaining share in the etch and process diagnostics market segments specifically.

“Historically, AMAT has used the downturns to gain share, but we see scant evidence of this during the current downturn,” he added.

Meanwhile, Goldman Sachs analyst James Covello wrote in a Sunday client note that while the company is getting customers to sign off on its SunFab lines, the market is still “extremely skeptical” of Applied Materials’ chances to succeed long term in the thin-film solar market.

Applied Materials Details Progress Towards Industrializing PV Solar

Monday September 21, 2009, 10:02 am EDT

HAMBURG, Germany–(BUSINESS WIRE)–At its annual solar analyst and press briefing today at the Photovoltaic Solar Energy Conference and Exhibition (PVSEC), Europe’s largest solar tradeshow, Applied Materials (AMAT) executives provided updates on Applied’s solar strategy, including highlights of the company’s business and technology roadmaps for both crystalline silicon (c-Si) and thin-film solar photovoltaics (PV). The company also announced a number of new c-Si solar PV products.

“We are seeing substantial progress in the global industrialization of the solar industry,” said Mike Splinter, chairman and CEO of Applied Materials. “The technology and products Applied is delivering allow our customers to improve solar panel efficiency and reduce cost per watt, leading us rapidly toward a future where solar proves itself as the cleanest, most logical and cost-effective way of generating power.”

Preparing for the Crystalline Silicon Factory of the Future

In his keynote presentation, Dr. Mark Pinto, chief technology officer and general manager of Applied’s Energy and Environmental Solutions Group (EES), highlighted how factories that make c-Si solar panels are becoming more technically advanced, with new process steps and automation boosting solar panel efficiency, lowering manufacturing cost, and driving up factory scale. New tools from Applied’s Precisions Wafering Systems and Baccini Cell Systems divisions are enabling thinner wafers, precision alignment and deposition, faster processing times and higher wafer throughput. Advanced automation is leading to better tool-to-tool process management, substantial material cost reductions and higher quality. The semiconductor industry serves as an example of how increasing investments in manufacturing technology can produce cost-effective gains in productivity and output and enable dramatic cost per watt reductions for end-users.

Pinto contrasted today’s mainstream c-Si factory running approximately 1,500 wafers per hour at 16% efficiency – with as much as 2% line breakage – with the “crystalline factory of the future.” With substantial improvements in equipment and full automation of facilities by 2012, Pinto predicted that output will double to more than 3,000 wafers per hour at greater than 20% efficiency – with breakage cut by more than half.

“To drive performance and reduce costs, the industry will become more technology-intensive, with new materials, applications, integration schemes, and factory automation and control,” said Pinto. “In the factory of the future, Applied expects to address over 55% of the c-Si PV solar manufacturing opportunity. With Applied’s capabilities in equipment and processes, we continue to look for new areas where we can work with our customers to increase their output, quality and profitability.”

Applied Materials’ HCT MaxEdge Wire Saws Qualified for Production by Leading Solar Wafer Manufacturers

Monday September 21, 2009, 9:05 am EDT

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) announced today that its recently-launched Applied HCT MaxEdge™ wire saw is already in volume production at key customers in Europe and Asia for solar photovoltaic (PV) wafering applications. The MaxEdge system revolutionized wire saw technology with the industry’s first dual-wire system, enabling significantly higher throughput and load capacity than competitive systems, while requiring much less factory floor space and fewer operators for equivalent megawatt output. MaxEdge systems have been qualified for production in as little as four weeks, rapidly meeting customers’ stringent performance and quality specifications.

According to Dr. Patrick Markschläger and Axel Schmidt, managing directors of Wacker Schott Solar, “The MaxEdge systems are an important part of our commitment to delivering competitive, high-end products that meet the exacting specifications of our customers. Our excellent working relationship with Applied resulted in very successful start-up of the MaxEdge systems. We are confident that this teamwork will enable us to continue to achieve the world class yield and productivity we need to meet our customers’ current and future roadmap requirements.”

“We are experiencing strong demand for the MaxEdge technology, with over 40 systems shipped in the last three months,” said Jean-Maurice Imbert, general manager of Applied’s Precision Wafering Systems division. “The system’s rapid market momentum shows that the technology is meeting the expectations of PV customers focused on both quality and cost. We worked closely with our customers to boost wafer output and to lower operating expenses – which are critical to making solar electricity competitive with grid power.”

Launched in March 2009, the uniquely designed MaxEdge system delivers 50% higher productivity than the previous generation of wire saws by using two, independently-controlled 120μm diameter cutting wires. Advanced process control is used to lower wire tension, reducing wire wear and unplanned downtime, while maintaining wafer thickness uniformity and surface finish. Reduced tension also allows smaller diameter cutting wires to be used, resulting in significantly less silicon loss without compromising yield. For more information, please visit http://www.appliedmaterials.com/products/maxedge_3.html.

LDK Solar Certifies Applied Materials’ HCT MaxEdge Wire Saws for High Volume Production of Solar Wafers

Monday September 21, 2009, 3:15 am EDT

XINYU CITY, China and SUNNYVALE, Calif., Sept. 21 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd . (LDK), a leading manufacturer of solar wafers, has qualified Applied Materials’ (AMAT) HCT MaxEdge(TM) wire saws for volume production, certifying that the system has met all performance and quality specifications. The successful completion of this factory acceptance testing (FAT) is part of the installation of more than 50 MaxEdge systems at LDK Solar that is due to be finished next month.

“We selected Applied’s MaxEdge wafering systems because of their industry-leading productivity and capability to produce advanced solar wafers in very high volumes,” stated Dr. Yuepeng Wan, CTO of LDK Solar. “This new generation of Applied’s HCT wire saws has now proven it can deliver the repeatable high yields necessary to deliver superior quality, cost-effective wafers to our customers. In addition, LDK has received excellent on-site support from Applied’s engineers during our aggressive ramp.”

“We are very pleased that the MaxEdge system has passed this important milestone at LDK Solar,” said Dr. Mark Pinto, senior vice president, corporate CTO and general manager of Applied’s Energy and Environmental Solutions group. “LDK Solar is known for its advanced wafer production capability and Applied Materials is committed to providing leading-edge technology and service to meet the most critical performance, yield and uptime requirements to drive down the cost per watt of solar electricity.”

Applied Materials Introduces Multiple Printing Capability for Producing Higher Efficiency Solar Cells

Thursday September 17, 2009, 7:30 am EDT

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) today announced its Baccini Esatto Technology™, a high precision, multi-step screen printing capability for Applied’s market-leading Baccini back-end solar cell processing systems. Featuring proprietary hardware and software innovations, the Esatto Technology is designed to increase the efficiency of crystalline silicon (c-Si) solar cells by enabling the fabrication of advanced contact structures. The first of several applications of the Esatto Technology is for double-printed metal line deposition where it has been shown to raise absolute cell efficiency by as much as 0.5%.

“Currently being used in customer production, Esatto Technology demonstrates our commitment to rapidly advance crystalline silicon technology by providing comprehensive solutions that enable higher efficiency,” said Davide Spotti, vice president and general manager of Applied’s Baccini Cell Systems division. “Working with leading suppliers to optimize consumable materials and printing techniques, we’ve created a unique capability to help customers quickly deploy advanced cell patterns in production environments and bring their higher value products to market.”

The Baccini Esatto Technology provides customers with a cost-effective upgrade to their current and future Baccini back-end systems with proven reliability and high repeatability. The result of several proprietary hardware and software innovations including high resolution imaging, screen alignment, and advanced process control, the Esatto Technology allows multiple layers of different materials to be overlaid with better than ±15μm repeatability.

Esatto Technology was designed to enable advanced contact formation techniques such as double-printed frontside metal lines and the multiple process flows required to create selective emitter structures. The first application of Esatto Technology in production is for double-printed metal lines. This application enables manufacturers to print taller, narrower grid lines, thus reducing the shadowing effect caused by wide grid lines while improving electrical conductivity. In a production environment, Esatto Technology allowed the replacement of single 120μm wide lines with two-layer, double-height lines less than 80μm wide on the finished cell.

For more information on the full line of Applied Baccini solutions for crystalline silicon solar cell manufacturing, visit www.appliedmaterials.com/products/solar_crystal_silicon_3.html.

Solar Power On Pause

Peter C. Beller, 09.16.09, 03:30 PM EDT

With falling prices and scarce financing for solar panels, investors have few opportunities.

Like the microchip industry, makers of photovoltaic panels have to deal with rapidly falling prices for their latest products. Unlike the computer business, though, solar power (for the moment) lives and dies by two things: government subsidies to customers and financing for big projects. Both are on the wane, and that means investors who want to bet on the sun’s unlimited energy have few places to turn, say analysts at Deutsche Bank.

Just a few years ago, solar stocks were the hot thing. Government incentives in Germany, the U.S. and elsewhere had homeowners getting paid to install panels on their roofs. Cheap credit led to a host of projects, some of them far-fetched, to build solar arrays in deserts and empty fields. Oil’s soaring price helped, too. Nowadays, solar makers produce a commodity product (few companies can claim to make a more efficient solar cell) at a time when consumers and businesses look first at their bottom line. In that light, solar power is still too costly for too many people.

The result is that prices are falling dramatically. Even Deutsche Bank can’t keep up. In July, they thought prices could slip to $2 a watt this year and $1.85 next year. Now $1.50 a watt looks likely in 2010. That’s one reason the analysts, Steve O’Rourke and Peter Kim, have a “hold” on many of the industry’s major firms.

One of the few solar players that can actually claim a better product is SunPower (SPWRA, SPWRB), based in San Jose, Calif. SunPower charges slightly more for its panels, in part because it provides certain services to the mom-and-pop distributors that effectively retail its products to customers. O’Rourke and Kim expect the company to maintain its advantage but predict earnings of just 89 cents a share this year, less than half the profit of 2008. They have a “hold” rating on the stock, which has fallen 60% in the past year.

Another longtime favorite of Wall Street is Applied Materials (AMAT), which turned its expertise in making the precision equipment that produces microprocessors into a business supplying solar makers (both chips and photovoltaics rely on silicon wafers). Solar is only a portion of Applied’s sales, but it became a big reason to like the stock, with the booming green energy sector countering the up-then-down cycle of the microchip business. No more, say the analysts, who rate the stock a “hold” with the chip and solar segments slumping at the same time.

Canadian Solar (CSIQ) has actually fared better than many peers through the downturn, with its stock off 27% in the last year. The firm is investing in new technology that could make its panels more efficient than the industry standard and is on track to cut costs, not just for raw materials, substantially. While Canadian Solar says prices could stabilize at $1.50 a watt next year, O’Rourke and Kim have their doubts. They have a “hold” rating on the stock.

Good news for the industry is that residential customers have continued to buy, thanks to continuing, if diminished, subsidies around the globe and the social cachet of lower utility bills. Financing from banks for commercial projects is still at a trickle, but a trickle can turn back into a steady flow, say the analysts.

Applied Materials Announces Cash Dividend

Wednesday September 16, 2009, 9:00 am EDT

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. (AMAT) today announced that its Board of Directors has approved a quarterly cash dividend of $0.06 per share payable on the company’s common stock. The dividend is payable on December 3, 2009 to stockholders of record as of November 12, 2009.