Key takeaways from Applied Material’s analyst day meetings this week included an update on the initial impact of the Japan earthquake/tsunami on operations and supply chain, and how the company thinks it can expand its c-Si solar manufacturing technology.
by James Montgomery, news editor
March 25, 2011 – Applied Materials had its Analyst Day on March 23. Key takeaways included an update on the initial impact of the Japan earthquake/tsunami on operations and supply chain, and how the company thinks it can expand its c-Si solar manufacturing technology.
Quickly updating on the Japan earthquake & tsunami situation, AMAT chairman/CEO Mike Splinter noted that the company’s 650 staff and families are all safe. The company has 22 facilities in Japan; some sustained minor damage but all are back in operation, he noted. There has been “minor impact” on customers, but so far there has been “no material impact” on AMAT through 2Q11 — though the situation is still “dynamic and unpredictable,” he added. Joe Flanagan, SVP of operations, added that the company has been able to address risks for all its Tier 1 and Tier 2 suppliers, and in some places concluded mitigation plans. There’s some infrastructure questions, but “we’re making prudent assumptions” and planning around them, he said.
Specifically commenting about the company’s solar activities, EVP Mark Pinto pointed to AMAT’s products for c-Si PV and “product enhancements” for thin-film PV. New growth is seen in extending Baccini Esatto technology in front metal, point contact, and selective emitter, enabling “up to a 2 point efficiency gain,” though this discussion was “short on some of the technical details,” writes Barclays analyst CJ Muse in a research report. After three years with negative-teens operating margins, Pinto projected 26% operating margins (non-GAAP) in 1Q11, and gaining more than five points of share in wafering systems, Pinto pointed out.
In the future AMAT is looking at Gen3 c-Si and “disruptive” thin-film technologies, as well as expanding into manufacturing equipment for energy storage/batteries.
Still, there’s increasing concern about possible solar overcapacity and a slowdown in capacity additions. “At current run rate, Solar is roughly 20% of the revenues and slowdown in the area can be significant,” noted Credit Suisse analyst Satya Kumar, in his own research report.
A fuller review of the entire Applied Materials analyst day takeaways can be found here, including updates on semiconductor equipment spending, solar, LEDs, and why tablets and electric vehicles are spurring demand for legacy tools.