Greentech Media

When Applied Materials (NSDQ: AMAT) entered the solar market in 2006, it made an understandable splash.

After all, it is the world’s largest semiconductor-equipment manufacturer, and many analysts have speculated that large chip companies could have a natural advantage in the market.

Now, news of semiconductor companies warming up to solar is becoming commonplace.

Earlier this week, National Semiconductor (NYSE: NSM) launched an inverter technology called SolarMagic, which it claims can convert the direct current created by solar panels into usable alternating current more efficiently (see National Semi Casts SolarMagic). The news came after SVCT Technologies, which provides research and development for chip companies, said it would expand its services into solar (see Green Light post).

Last month, Intel Corp. (NSDQ: ITNC) – the world’s largest semiconductor manufacturer – spun off a solar-cell startup called SpectraWatt, while IT company IBM (NYSE: IBM) announced it would develop thin-film solar through a joint venture with Tokyo Ohka Kogyo and Reuters reported that Semiconductor Manufacturing International Corp. (NYSE: SMI) in Shanghai planned to make polysilicon for solar cells (see Chip Giants Delve Deeper Into Solar and Companies Crowd Into CIGS Space).

And in May, memory supplier Qimonda (NYSE: QI) formed a joint venture to produce crystalline solar cells with Centrosolar Group.

The trend makes plenty of sense, analysts say.

Slower growth in the traditional microprocessor markets, as well as perceived similarities between semiconductors and solar technology that companies see as crossover opportunities for their intellectual property, has made the solar industry particularly alluring, Canaccord Adams analyst Jed Dorsheimer said.

Worldwide semiconductor revenue grew 4.3 percent to $273.9 billion in 2007, according to Gartner, which predicts growth of 4.6 percent to $286.5 billion this year (see this press release for 2006 numbers). That compares with solar-industry revenue growth of 50 percent to $30 billion in 2007, according to Photon Consulting, which forecasts 43 percent growth to $43 billion this year.

“We’ve been saying for a long time: This is the domain of the semiconductor guys,” said Ron Pernick, a principal with Clean Edge, in response to the Intel news earlier this month. “If Intel can take intelligence out of its semiconductor operations, spin it out and deliver on funding, who better to scale up manufacturing than one of the largest makers of chips on the planet?’’

It’s not just semiconductor companies, either. Other large corporations also are entering the market.

Perhaps most notably, search giant Google in November said it planned to help develop renewable energy (see Googling Greentech). And computer company Hewlett-Packard Co. (NYSE: HPQ) last month announced a contract to license technology to concentrating solar company Xtreme Energetics.

But there’s no guarantee that large conglomerates with experience in semiconductor and other industries will beat out solar companies already active in the market, analysts said.