Applied Materials buys Italian solar gear maker

SAN FRANCISCO, Jan 31 (Reuters) - Applied Materials Inc (AMAT.O) said on Thursday it acquired Italian solar equipment maker Baccini SpA for $334 million, as the No. 1 chip equipment maker seeks to build its solar business.

Applied Materials Chief Executive Mike Splinter said in a statement that the acquisition should speed his company's efforts to become the leading supplier to the solar industry.

With the purchase and its array of solar cell technologies, Applied plans to cut the production costs for crystalline silicon cell and thin film modules while also decreasing the grams-per-watt usage of silicon material, the company said.

Silicon is among the principal ingredients in solar cells.

Splinter told Reuters in a Jan. 17 interview that the Santa Clara, California-based company aims to grow its solar business to a revenue level of $2.5 billion to $3.5 billion annually by 2010.

He also said at the time that he expected Applied's solar business to be "pretty strong this year."

Privately held Baccini will be folded into Applied's Solar Business Group, which makes equipment used to produce solar cells.

Splinter also said on Thursday that Applied's goals include driving down the cost of solar electricity to make it competitive with conventional electricity sources, and speeding the adoption of solar technology in homes and businesses.

Shares of Applied were down 7 cents to $17.85 in afternoon Nasdaq trade. (Reporting by Duncan Martell; editing by John Wallace)