LOS ANGELES (Reuters) - Applied Materials Inc’s solar equipment business could make up as much as a quarter of its sales in 2009, up from about 10 percent this year, Chief Executive Mike Splinter said on Thursday.
In an telephone interview, Splinter said orders from its solar customers were still strong, despite a weakening global economy and tightening credit outlook.
“Our pipeline is still full, people are still very interested in both expanding capacity and developing new capacity in the solar cell area,” Splinter said. “We are working hard to make sure we can fulfill those needs.”
Applied Materials, the No. 1 computer-chip equipment maker, is aggressively expanding its solar equipment business to take advantage of booming demand for renewable energy sources.
Last year, Splinter said, solar made up “close to zero” of the company’s sales and yet strong adoption of solar power in the United States could push that figure as high as 25 percent next year.
“The United States is poised for strong solar adoption,” he said, noting the U.S. Congress’ approval last week of an 8-year extension of tax credits for solar power. “Now we just need to see the follow-through and how much emphasis the new president puts on clean and renewable energy.”
The global credit crunch will drive up borrowing costs, Splinter said, although he added that smaller solar projects rather than large, utility-scale power plants would likely feel the brunt of that.
“Utility companies are able to get money at very good rates,” he said. “If anybody is going to suffer in the space it will be little projects, not big projects.”
For Applied Materials, specifically, Splinter said the company was well-placed to weather a downturn because of its more than $3.5 billion in cash.
He declined to discuss his outlook for Applied Materials’ primary chip equipment business, saying the company would discuss it in detail during its next quarterly earnings announcement.
Applied Materials shares rose 33 cents, or 2.7 percent, to close at $12.80 on the Nasdaq.
Reporting by Nichola Groom; editing by Carol Bishopric and Andre Grenon
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