Applied Materials up after new solar line unveiled

SAN FRANCISCO (Reuters) - Applied Materials Inc (AMAT.O) shares rose on Tuesday after the chip making equipment maker introduced new solar power production lines.

The new "SunFab" products, introduced on Monday at a solar energy conference in Milan, are for thin-film silicon panels four times larger than those now on the market.

The company said the new panels would have a lower production cost per watt to reduce the price of solar electricity.

Banc of America Securities analyst Mark Fitzgerald said the first SunFab lines would probably produce solar cells with efficiencies at 6 percent to 8 percent.

"We think to be competitive longer term, efficiencies need to be in the 10-12 percent range," Fitzgerald said in a research note.

"Lower manufacturing costs will be the net result enabling the industry to sustain the cost per watt reduction curve," he said.

Fitzgerald has a "buy" rating on Applied Materials shares.

Applied Materials were up 54 cents, or 2.5 percent, at $21.90 in afternoon Nasdaq trade.

(Reporting by Leonard Anderson)