Applied tips $1.9B solar deal

By Suzanne Deffree, Managing Editor, News -- 3/4/2008

Applied Materials Inc in two separate SEC filings this week made clear its stance as a leader in the solar market and in one of the filings tipped a $1.9 billion solar equipment deal.

In an 8K filing titled “Report of unscheduled material events or corporate event” and dated March 4, 2008, Applied disclosed that it has entered into sales agreements with a privately held corporation based outside the United States that will see Applied supply equipment and installation/warranty services for multiple solar factories to be constructed by unidentified buyer.

“The factories, which will feature Applied SunFab thin film tandem junction production equipment, collectively are expected to produce an annual output of solar photovoltaic modules capable of generating electricity on a gigawatt scale. The aggregate purchase price for the equipment and related services (exclusive of post-warranty services) to be provided by Applied under the agreements is approximately $1.9 billion,” the filing reads.

In a second 10Q filing titled “Quarterly report which provides a continuing view of a company's financial position” and dated March 3, 2008, Applied said it will continue its investment strategy in the solar segment.

“Applied expects that changes in its business will affect its working capital components in fiscal 2008, primarily related to its Energy and Environmental Solutions segment. Applied believes that the solar industry is moving to increasingly greater factory output of solar modules, including output on a level sufficient to annually generate electricity on a gigawatt scale. Applied has entered into contracts with multiple customers for its SunFab Thin Film line, the fulfillment of which will require Applied to invest in inventory and incur related costs,” the filing states.

The two filings are the latest evidence of equipment manufacturer’s interest in the solar segment. The company in February named a CTO for its solar business to further drive the group. In late 2007, the company opened a SunFab solar R&D center in Germany, making the site its principle solar research location.  Also in 2007, Applied announced plans to acquire HCT Shaping Systems, a privately held supplier of precision wafering systems used in manufacturing crystalline silicon substrates for the solar industry, and separately detailed its SunFab Thin Film line, touting it as the world’s first and only integrated production line for manufacturing thin film silicon solar modules using 5.7-square-meter glass panels. Applied first launched its plan to enter the photovoltaic market in 2006. 

Both SEC filings can be found on Applied’s Web site investor page.

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