Applied Materials aims for solar sector

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Applied Materials, the world’s biggest tool provider for the semiconductor industry, is expanding into equipment for the booming solar energy industry.

Applied launched its solar strategy in a webcast presentation on Tuesday, with Mike Splinter, chief executive, promising to reduce the cost per watt of generating solar power from $3-$5 down to $1.

“We plan to change the cost equation for solar power through adaptation of our existing technology and new innovation in order to help make solar a more meaningful contributor to the global energy supply,” he said.

Applied is entering the equipment market for photovoltaics – the direct conversion of the sun’s rays into electricity.

In July, it completed the acquisition of Applied Films, a supplier of thin-film deposition equipment for solar cells, paying $464m - or $300m after taking into account its target’s cash on hand and equivalents.

Most cells depend on silicon like the chip industry and thin-film coating materials being developed for panels can reduce the amount of silicon needed and make cells cheaper.

The solar cell market is expanding at a compound annual growth rate of 35 to 40 per cent. Applied said the overall solar equipment market is expected to grow from around $1bn in 2006 to more than $3bn in 2010. It aimed to grab as much as 20 per cent of that market.

“The solar industry has reached the inflection point that Applied Materials has been waiting for, as solar customers seek economies of scale with suppliers who can better meet their needs for global support,” said Mr Splinter.

Applied plans to provide a combination of manufacturing tools, together with the technology and process innovations it has already developed for the semiconductor and flat-panel display industries.

It said this would help its customers to increase conversion efficiency and yields on panels.

In a Harris Interactive survey of US homeowners without solar power, commissioned by Applied, 87 per cent cited a variety of barriers to adopting it, with the cost of installation being the biggest hurdle.

Applied shares were 0.2 per cent higher at $16.88 in midday trading in New York.

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