November 19, 2007 - Seeking to boost its solar profile and end-market reach, Applied Materials is acquiring Italian firm Baccini SpA, a supplier of equipment for manufacturing crystalline silicon (c-Si) photovoltaic (PV) cells, for about 225 million euros (US ~330M) in cash.

Baccini's automated metallization and test systems target "critical processing steps in c-Si solar cell production that significantly affect solar cell efficiency and yield," enabling use of ultrathin (~120-microns) wafers -- helping reduce use of silicon material that represents ~60% of solar cell manufacturing costs, AMAT noted in a statement. The Italian firm claims to have delivered the PV industry's first integrated metallization line, over 20 years ago.

Combining Baccini's technology with AMAT's work in semiconductor interconnect processing, manufacturing know-how, and R&D resources, will help drive down the cost and ramp up the scale of PV manufacturing to help solar energy reach grid parity, AMAT noted in a statement. Furthermore, noted AMAT president/CEO Mike Splinter, the acquisition gives AMAT inroads into Italy as an end-market, a region "with strong geographic potential for realizing early grid parity" -- due to comparatively high amounts of sunlight and fewer alternative energy resources, added

AMAT CTO Mark Pinto told MarketWatch that the deal came about because Baccini, like other privately held European solar firms, needs investment capital. "They are choosing different paths, some IPO, some private equity and some being acquired," he said. "Most of the companies aren't doing this to cash out." Pinto added that the deal will boost AMAT's EPS in the first year and GAAP in year two, and that Baccini's sales in 2007 "will be quite a bit higher" than last year.