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Applied Materials enters new markets with acquisition of Applied Films |
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May 04, 2006 at 04:06 PM |
 Applied Materials is going after new market opportunities in the field of thin film deposition for solar, flat panel and other glass based markets with the acquisition of Applied Films. The all stock transaction is expected to cost Applied Materials approximately $464 million US dollars. The companies expect to close the transaction during Applied Materials' third fiscal quarter of 2006.
"The acquisition of Applied Films expands our flat panel business to offer color filter products, and opens the fast-growing solar market for us," said Mike Splinter, president and CEO of Applied Materials. "Both companies have a strong history of developing new and innovative technologies. Together, we expect to speed the development and availability of new products for a variety of emerging applications."
There would seem to be little product overlap even with the Flat Panel Display market, which they both serve. Applied Materials supplies CVD equipment into the FPD market, while Applied Films supplies PVD tools. However, during a conference call with financial analysts, Mike Splinter wouldn't be drawn on questions surrounding a PVD tool being developed at Applied Materials.
"The acquisition is also anticipated to provide growth opportunities for Applied Materials in solar cell as well as flexible electronics applications where our combined knowledge and capabilities will enable us to bring a new level of expertise to these expanding markets," said Mark Pinto, senior vice president and chief technical officer of Applied Materials. "In solar cell manufacturing, we expect to help customers deliver higher levels of output at lower production cost -- a critical step to making alternative forms of clean energy more available and affordable. By combining Applied Films' existing platforms with Applied Materials' broad process portfolio and global customer relationships, we can also accelerate a number of new applications for electronics on flexible substrates."
Splinter commented that the solar wafer business was in a period of sustained growth, somewhere between 35 and 45 percent CAGR through 2010. Splinter suggested that although Applied Films gained only about 5 to 10 percent of revenues from the solar wafer industry after entering it two year ago, he expects growth to be significant in the coming years.
Applied Films operations will be amalgamated into Applied Materials new business and new products division that is headed up by Mark Pinto, Applied Materials CTO and apparent driver of the company's move into clean energy markets.
Applied Films lost approximately $10 million US dollars in its 2005 fiscal year.
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