Applied Materials hamstrung by excess capacity

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Several years removed from the PV manufacturing boom of 2010-2011 and the widespread factory closures and bankruptcies that followed, is the next purchasing cycle for PV production equipment finally in view?

Tuesday provided mixed signals, at best.

On the positive side, Bedford, Massachusetts-based Spire Corp. announced a new contract for a custom solar simulator from "a major Chinese thin-film module manufacturer with facilities in Europe, China and the United States."

But across the country in Silicon Valley, Applied Materials provided no reason to believe in an immediate major resurgence for the segment during a presentation of its first-quarter results.

In response to an analysts’ request for "more color" on its PV division, the company’s chief financial officer, Bob Halliday, replied, "On solar, we are managing that pretty darn well. The end use market for solar panels and solar cells is pretty good, but there still is an overhang of excess capacity out there that’s still being eaten up. So it’s sort of a neutral market. It’s treading water. It’s just quarter-to-quarter variations on small numbers."

The "small numbers" the Santa Clara, Calif.-based company reported for its solar division in its first quarter included a $3 million loss on sales of $55 million. Applied also reported $50 million in new orders.

While the solar sales were "below expectations," Halliday said Applied expects these to rise to $75 million next quarter.

During the boom in PV manufacturing capacity – for example, in 2011, when Applied was the sector’s most prolific supplier – the company’s solar division generated in excess of $1 billion in annual sales.

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