Applied Materials to cut 500 in solar reorg (Silicon Valley)

Applied Materials Inc. said Wednesday it will cut up to 500 jobs as it shifts from selling its SunFab thin-film solar panel manufacturing equipment and concentrates on other energy businesses.

The Santa Clara company (NASDAQ:AMAT) said its energy and environmental solutions unit will now focus on selling equipment used to make crystalline silicon solar panels and LED lighting.

The move comes after Applied wrote down $83 million in thin film solar panel manufacturing equipment in the spring as sales plummeted.

CEO Mike Splinter blamed a number of factors for the lack of success in the thin film business that Applied thought several years ago would be quite promising.

"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," Splinter said.

The company also plans to divest its low-emissivity architectural glass coating products, which is more efficient because it reflects more energy than other glasses. Instead it will continue development of emerging technologies such as "smart" electrochromic glass that can be darkened or lightened electronically.

Applied said the reorganization will cut its annual operating expenses by at least $100 million a year and make the energy unit profitable in fiscal year 2011.

It will discontinue sales to new customers of its SunFab lines for manufacturing thin film solar panels. It will continue, however, to offer to sell individual tools to thin film solar manufacturers, including chemical vapor deposition and physical vapor deposition equipment.

It also said it will continue research and development efforts to improve thin film panel technology and will support existing SunFab customers.

Applied's solar R&D center in Xi'an, China, will now concentrate on advancing other solar power technologies, including crystalline silicon solar.

Read more in the Silicon Valley/San Jose Business Journal.