Applied Materials, the semiconductor equipment giant, said on Wednesday that it will discontinue the SunFab line for thin-film solar panels and cut about 500 workers.

It's the end of a saga. Applied jumped into the amorphous silicon solar business in 2006 through acquisitions and talked about ultimately creating factories that would produce gigawatts worth of solar panels a year. The center of the strategy was SunFab, a factory-in-a-box. The company landed early clients like Signet Solar, Suntech and Masdar PV.

Cut to early 2010. Back in March, Eric Wesoff and I wrote an article reccommending that Applied get out of the thin film business. While the company was experiencing growth in equipment for crystalline silicon panels and LEDs, amorphous was losing ground. One reason was that panels from the SunFab line cost about 30 percent more than competing panels.

"We are fully committed," said John Antone, corporate vice president of marketing in the energy and environmental solutions group at Applied at the time. "We believe that Applied's a-Si is world class."

The article seemed to resonate for many in the industry. Soon afterwards, analysts at Goldman Sachs attributed a rise in Applied's stock to rumors that it would phase out SunFab and cited the article. (Did we get a thank-you letter for adding over a billion to the company's capital? No!) Despite early protestations to the contrary, at the end of March, Applied indicated it would reduce its investments in SunFab.

In April, Signet Solar, Applied's first customer, pulled plans to build a factory in New Mexico, while another early customer, SunFilm, filed for bankruptcy protection. SunFilm was actually two Applied customers in one: last year, it bought Sontor. Then, more recently, Masdar PV, another large customer, abruptly got rid of its CEO.

Then Signet filed for insolvency in June.

"The thin film market has been negatively impacted by several factors, including delays in utility-scale solar adoption, solar panel manufacturers' challenges in obtaining affordable capital, changes and uncertainty in government renewable energy policies, and competitive pressure from crystalline silicon technologies," said CEO Mike Splinter in a prepared statement.

The restructuring will cut about $100 million in operating expenses.

Tags: amorphous silicon, applied materials, masdar pv, signet solar, silicon solar panels, sunfab