"Applied Materials stock hit five-year highs on Tuesday after the chip-making equipment giant agreed to buy Tokyo Electron in an all-stock deal valued at more than $9 billion," according to the San Jose Business Journal.

Applied is the number-one builder of semiconductor manufacturing equipment; Tokyo Electron is number three. ASML is number two. And Applied, like many in the semiconductor equipment industry, is facing difficult times. Applied also has a strong offering of c-Si wafer and cell processing equipment.

But here's the real reason we're covering the merger.

Way back in July 2010, in a bit of drama, Applied Materials discontinued its SunFab line of amorphous silicon (a-Si) thin-filmsolarpanels and cut about 500 workers. As we've reported, Applied entered the amorphous silicon solar business in 2006 through acquisitions and envisioned factories that would produce gigawatts' worth of large-scale solar panels each year. The center of the strategy was SunFab, a factory-in-a-box product. The company landed early clients like Signet Solar, Suntech and Masdar PV.

But low efficiencies (below 11 percent), high costs, and cheap Chinese crystalline silicon doomed a-Si and the SunFab effort, and by 2010, Applied had cut its losses and killed the business.

Meanwhile, in March 2012, the a-Si equipment division of Oerlikon, a Swiss conglomerate owned by a Russian oligarch, was divested to TEL in a $275 million deal.  

With this acquisition, the now-larger Applied Materials is once again the provider of a-Si equipment for solar panels. Applied gets to try a-Si all over again. The TEL a-Si business still has a few customers, such as Russia's Hevel.

Amorphous silicon solar technology has a troubled commercial track record. In addition to Applied, other defunct a-Si producers include OptiSolar, Sencera, and ECD. Sharp entered a JV with Enel and ST Microelectronics in a-Si a few years ago and still has the vestiges or its a-Si business. Also struggling to remain competitive in amorphous silicon and its variations are Xunlight, HelioSphera, and NanoPV.

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