Applied Materials Restructuring Solar Business

In order to meet its recently announced goal to reduce the annual revenue breakeven level in its Energy and Environment Solutions (EES) segment from $800 million to $500 million in FY 2013, Applied Materials yesterday said it would be laying off approximately 250 people and moving its precision wafering system (PWS) solar business from Cheseaux, Switzerland to Asia. The EES segment includes Applied Material’s solar and LED business units.

The company said in a report to investors that PWS business operations and customer support functions will be relocated primarily to Treviso, Italy, the headquarters for Applied’s Baccini Cell Systems, and Xi’an, China, the site of Applied’s Solar Technology Center. PWS’s headquarters and new product development will remain in Switzerland. The restructuring will also include significant reductions in development activities for LED.

Applied Materials estimates the total pre-tax cost of implementing the plan to be in the range of $70 to $100 million, or $0.04 to $0.06 per share, which will be incurred over the next 12 to 18 months beginning in the third quarter of fiscal 2012. Part of this estimate consists of up to $40 million in severance and other employee-related costs.

So far, more than fifteen other companies in the solar space, including Sunpower and First Solar, have announced bankruptcies, scaling back or restructuring of their operations in the past 12 months. Solar manufacturing companies are suffering due to low panel prices and reduced government incentives for solar power in what were once key global markets.

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Jennifer Runyon
Jennifer Runyon has been studying and reporting about the world's transition to clean energy since 2007. As editor of the world's largest renewable energy publication, Renewable Energy World, she observed, interviewed experts about, and reported on major clean energy milestones including Germany's explosive growth of solar PV, the formation and development of the U.S. onshore wind industry, the U.K. offshore wind boom, China's solar manufacturing dominance, the rise of energy storage, the changing landscape for utilities and grid operators and much, much, more. You can reach her at Jennifer.Runyon@ClarionEvents.com Today, in addition to managing content on Renewable Energy World and POWERGRID International, she also serves as the conference advisory committee chair for DISTRIBUTECH, a globally recognized conference and expo for the transmission and distribution industry. In her role, she works in close cooperation with a large team of committed industry executives to shape the educational content for the event. She also helps assemble the renewable energy content for POWERGEN and helped launch the first Grid-Scale Storage Summit, a co-located event at HYDROVISION International. She has traveled to Germany to see onshore and offshore wind installations; Iceland to see geothermal energy in action; and France to see cutting-edge smart grids. In the U.S. she has visited and reported about bioenergy power plants in Florida, both large-scale and small-scale hydropower; and multiple wind farms, solar PV, and CSP installations. Formerly, she was the managing editor of Innovate Forum, an online publication that focused on innovation in manufacturing. Prior to that she was the managing editor at Desktop Engineering magazine. In 2008, she won an "Eddy Award" for her editing work on an article about solar trees in Vienna. In 2010, RenewableEnergyWorld.com was awarded an American Business Media Neal Award for its eNewsletters, which were created under her direction. She holds a Master's Degree in English Education from Boston University and a BA in English from the University of Virginia.

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