North Coast Solar Stocks

September 2, 2009

Applied Materials sees signs of solar uptick

Filed under: AMAT — Tags: , , , , — Jason @ 12:45 am

Wed Sep 2, 2009 12:45am EDT

By Poornima Gupta

SANTA CLARA, California (Reuters) – Applied Materials Inc. (AMAT), the world’s largest producer of chip-making gear, is seeing the first signs of improvement in the solar sector with the beginning of some capacity build-up in China, Chairman and Chief Executive Mike Splinter said on Tuesday.

“We are seeing investment for capacity in China, especially in making more wafers for crystalline silicon solar cell,” Splinter said in an interview on the sidelines of a solar event held in Santa Clara University. “People are making those investments because they believe the demand is going to be there.”

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

“We are seeing the first signs of solar coming back,” Splinter said.

Splinter said he believes China is where most of the solar panel manufacturing investment is going to be made in the near term.

“They (China) are making 50 percent of the solar panels today,” he said. “That trend continues in a strong way.”

Splinter said all of Applied Materials’ businesses are growing, with significant improvement in displays.

“We expect our display business to have a great year for the next 12 months,” he said. “Our expectation from this point is that all of our businesses are going to be on a growth leg.”

Splinter also said the company has seen an “uptick” in the chip business.

Applied Material has said it would at least break even this quarter and expects revenue to jump 10 percent to 20 percent in the period from the previous quarter.

But the Santa Clara-based company had warned that its solar equipment business — which saw orders and sales fall from the fiscal second quarter to the third — was still a swing factor.

Applied Materials gained no new orders in its last fiscal quarter for thin-film equipment, a crucial segment of the burgeoning solar equipment market that has been walloped by tightening credit and slower than anticipated demand.

“We are certainly talking to more people today,” Splinter said, but declined to say whether he had received any new contracts.

Splinter said the U.S. economy is still in “doldrums” but may have hit bottom.

The economy in China, on the other hand, is recovering, he said.

“China has clearly recovered and is recovering,” Splinter said. “In US, we are at the bottom. So, maybe, we will see some positive signs here.”

(Reporting by Poornima Gupta; Editing by Richard Chang, Leslie Gevirtz)

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