Applied Materials Discontinuing SunFab Sales

Applied Materials Inc. has announced that it will put a primary emphasis on opportunities in crystalline silicon (c-Si) solar and advanced energy, including light-emitting diode technology.

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 and physical vapor deposition equipment.

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 the Applied Materials' energy and environmental solutions (EES) segment a profitable segment in fiscal year 2011, the company says.

Research and development (R&D) 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 Materials' solar R&D center in Xi'an, China, will concentrate on advancing its c-Si solar and other technologies.

The company also plans to divest its low-emissivity architectural glass coating products, while continuing development activities in emerging 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 year 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 Inc.

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