Summary:

Applied Materials is leaving the thin film solar equipment business and plans to focus more on crystalline silicon solar, LED lighting and other “advanced energy” technologies, the chip equipment giant announced on Wednesday.

SunFab thin film production line (click to enlarge)

On Wednesday, chip equipment giant Applied Materials announced that it will leave the business of selling “turnkey,” or ready-to-use, thin film solar manufacturing equipment, and plans to focus more on crystalline silicon solar, LED lighting and other “advanced energy” technologies.

Applied Materials has been selling so-called turnkey equipment to would-be solar developers under its SunFab line. The idea with these types of products is that a solar maker can just buy the gear and start churning out panels with relative ease instead of developing the technology itself. But in reality, it’s not always that easy, or much of a money saver.

Applied Materials CEO and Chairman Mike Splinter commented in a statement today that despite “significant innovations” and “substantial progress” in the SunFab production line, “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.”

The company now says it plans to discontinue sales of the integrated SunFab line to new customers as part of a restructuring plan it hopes will cut annual expenses by at least $100 million and make the Energy and Environmental Solutions segment profitable in the 2011 fiscal year. The company said today that it will try to sell individual tools to thin film solar manufacturers, and continue research into more efficient thin film panels.

Applied Materials anticipates that carrying out the plan will roughly cost between $375 million and $475 million (for severance pay, inventory charges and other obligations), or 18-21 cents per share, including cash expenditures of $80 million. As many as 400-500 jobs will be on the chopping block, although some of those employees may transfer to other groups within the company.

Image courtesy of Applied Materials

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