UPDATE 1-Applied Materials picks up Advent Solar assets

* Financial terms of deal not disclosed

* Advent Solar develops solar technology

* Applied Materials says deal will help drive down cost

LOS ANGELES, Nov 6 (Reuters) - The world's largest chip equipment maker Applied Materials Inc (AMAT.O) said on Friday that it acquired Advent Solar in a deal it hopes will cut costs in its solar business.

The companies did not disclose how much Applied Materials paid in cash for the company's assets, including its intellectual property.

Applied Materials is relying on its solar equipment arm to boost growth as its traditional chip business falters, competing with Swiss technology group Oerlikon's (OERL.VX) solar arm.

Privately held Advent Solar, founded in 2002 in New Mexico, has technology that streamlines the assembly of photovoltaic solar panels, which convert sunlight into electricity.

The acquisition will help Applied Material cut the production costs for its solar panels, said Mark Pinto, the company's chief technology officer and general manager of its Energy and Environmental Solutions group, in a statement.

Like other companies in the solar sector, Applied Materials is working to drive down costs as the industry has been hit by a dearth of financing and a tumble in panels prices.

The company hopes to cut the cost of producing solar panels below $1 per watt in three years and is on track to post profits at its environmental unit next year. (Reporting by Laura Isensee, editing by Gerald E. McCormick)