Applied Materials Goes Deeper Into Solar Power (AMAT)

Applied Materials, Inc. (AMAT-NASDAQ) has agreed to acquire HCT Shaping Systems SA of Switzerland, for approximately $475 million at the current exchange rate in cash for HCT. HCT makes precision wafering systems used principally in manufacturing crystalline silicon (c-Si) substrates for the solar industry. This acquisition will help Applied in its strategy to reduce the costs of photovoltaic (PV) cell manufacturing to make solar energy more competitive.

HCT is a pioneer in precision wafering and has recently experienced rapid growth, supplying its products to c-Si solar manufacturers worldwide.  One of the major challenges in manufacturing solar cells is the cost and supply of the raw silicon material. In c-Si manufacturing, HCT’s precision wafering systems enable customers to significantly reduce the thickness of wafers used to make c-Si solar cells, decreasing silicon usage. In addition, Applied’s products for thin film solar cell manufacturing reduce silicon utilization by forming atomically thin layers of silicon directly from gases onto a glass substrate.

Mike Splinter, President & CEO of Applied Materials: "HCT will significantly expand our opportunities in the c-Si PV technology sector, which currently comprises 90% of solar panel production. By combining HCT’s precision wafering systems with Applied’s strong manufacturing technology and global support infrastructure, we believe we can take solar wafer manufacturing to the next level of production efficiency."

It appears as though Applied Materials is going to have a substantial operation outside of chip testing and equipment, even more than it currently has.  Its current market cap is $27.5 Billion based on yesterday’s $19.88 close, and the 52-week trading range is $14.39 to $20.78.

Jon C. Ogg
June 26, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.