Applied Materials Still Expanding Solar (AMAT, FSLR)

Applied Materials, Inc. (NASDAQ: AMAT) appears to not be slowing down on its solar ambitions, or at least not as much as we might have all guessed about six months ago when new expansions were being canned and when oil was at far lower prices.  This morning came an Applied Materials announcement that the company had opened the world’s largest non-governmental advanced solar research and demonstration facility in Xi’an, China.  We have not compared this to other large solar players, but the size of the labs and office buildings was listed as covering more than 400,000 square feet.  The site also contains an entire Applied SunFab™ thin film manufacturing line and a complete crystalline silicon pilot process, which are configured to closely simulate customer fabrication environments.

Today’s news is not a financial or guidance impact-event based upon its intent.  But it is the continued commitment to the solar industry at a time when many of the more junior players are still reeling from the financial crisis, lower orders, lower margins, and lower cost-benefit comparisons to more traditional energy sources.

The real direction for how solar shares trade will come later in the week when First Solar, Inc. (NASDAQ: FSLR) reports its earnings and a brief top 10 earnings preview.  We have seen a very mixed bag in the group, and with First Solar being the biggest of the US-based pure-play solar stocks it will set a benchmark for drawing a line between the men and the boys in the sector.

JON C. OGG
OCTOBER 26, 2009