Applied Materials restructures its energy group; to de-emphasize thin-film solar

July 23, 2010
Santa Clara, CA--Applied Materials is restructuring its Energy and Environmental Solutions (EES) segment to focus on opportunities in crystalline silicon (c-Si) solar while de-emphasizing thin-film solar.

Santa Clara, CA--Applied Materials announced plans to restructure its Energy and Environmental Solutions (EES) segment to put a primary emphasis on opportunities in crystalline silicon (c-Si) solar and advanced energy, including light-emitting diode (LED) technology. Upon completion of the restructuring plan, annual operating expenses are expected to decrease by at least $100 million on an annualized basis. The restructuring plan is intended to make EES a profitable segment in fiscal year 2011.

As part of the restructuring, Applied Materials will discontinue sales to new customers of its SunFab fully integrated lines for manufacturing thin-film solar panels and will offer individual tools for sale to thin-film solar manufacturers, including chemical vapor deposition (CVD) and physical vapor deposition (PVD) equipment. Research and development efforts to improve thin-film panel efficiency and high-productivity deposition will continue. The company will support existing SunFab customers with services, upgrades and capacity increases through its Applied Global Services segment. Applied’s solar R&D center in Xi’an, China will concentrate on advancing its c-Si solar and other technologies.

“While Applied has delivered significant innovations with our SunFab production line and made substantial progress on our technology roadmap, the thin film market has been negatively impacted by several factors, including delays in utility-scale solar adoption, solar panel manufacturers’ challenges in obtaining affordable capital, changes and uncertainty in government renewable energy policies, and competitive pressure from crystalline silicon technologies,” said Mike Splinter, chairman and CEO of Applied Materials. “Led by Mark Pinto, EES will focus on our industry-leading crystalline silicon solar business and on pursuing other opportunities in advanced energy technologies like LED lighting.”

The company also plans to divest its low-emissivity architectural glass coating products, while continuing development activities in emerging solar technologies such as “smart” electrochromic glass.

The cost of implementing the EES restructuring plan is expected to be in the range of approximately $375 million to $425 million, or $0.18 to $0.21 per share, which will be reported as cost of products sold and restructuring and asset impairments in the company’s consolidated statements of operations for the third quarter of fiscal 2010. This action is expected to impact between 400 to 500 positions globally. A number of affected employees may transfer to other groups or functions within the company. Cash expenditures related to these charges are expected to be no more than $80 million.

SOURCE: Applied Materials via Business Wire: www.businesswire.com/portal/site/appliedmaterials/permalink/?ndmViewId=news_view&newsId=20100721005848&newsLang=en

--Posted by Gail Overton; [email protected]; www.laserfocusworld.com

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