In reporting its first quarter fiscal 2011 financial results, Mike Splinter, chairman and chief executive officer of Applied Materials cited that the solar market had exceeded its expectations in 2010 and that he expected crystalline silicon solar equipment spending to increase by more than 30% in 2011. He said that over 6GW of PV modules were installed in the fourth quarter of 2010, bringing the total for the year to 17GW.
Record orders within its Energy and Environmental Solutions (EES) segment were reported at US$668 million in the first quarter, up 22% from the fourth quarter of fiscal 2010. The backlog in its EES segment stood at approximately US$1 billion at the end of the last quarter.
Net sales for the segment were US$476 million, down 22% from the fiscal fourth quarter which included US$230 million in thin film equipment sales.
However, sales of crystalline solar equipment grew almost 30%, helping to offset in part, the large SunFab order sign-off that occurred in the previous quarter.
Applied reported net quarterly sales and profitability records in crystalline silicon equipment. Operating income increased to US$144 million or 30% of net sales. The non-GAAP segment operating margin exceeded 25%, according to the company.
The Precision Wafering Systems (PWS) division within the EES segment passed an important milestone by shipping its 2,000th wire saw system. This was augmented with both its Baccini and PWS teams each shipping over 200 systems in the quarter.
Splinter noted that these shipment figures were more than the total number of units shipped in the first three quarters of 2010.
“Crystalline Silicon bookings are at a record level, indicating another strong quarter of growth in Q2. Our visibility through the second half of the year is strengthening but is still limited,” commented Splinter in the financial analyst conference call.
The cautious tone was in contrast to Splinters PV market forecast for this year. According to Applied Materials, it expects PV module installations to be in the region of 21GW-25GW, with the German and Italian markets projected to make up over half of the installations this year. Splinter noted that both the Californian and Chinese markets were becoming increasingly significant, though didn’t provide any figures.
The executive also noted that crystalline silicon module prices continued to fall, reaching spot prices as low as US$1.50 per watt in the fourth quarter of 2010.
“Our top customers remain profitable, are running their factories at full utilization and are increasing capacity. We are now projecting Crystalline Silicon CapEx for 2011 in the range of US$7 billion to US$9 billion, an increase of about 30% year-over-year. We expect 90% of this new capacity to be added in China and Taiwan,” noted Splinter.
With 28GW of PV module production capacity installed, Splinter noted that there was still not enough silicon or enough wafering capacity available to meet market demand this year.