You can call Applied Materials the green machine.
The Santa Clara, Calif.-based company, which made its name by designing equipment for semiconductor makers and television manufacturers, is bulking up to become the chief equipment maker for the greentech industry.
The company is building up an internal group to sell equipment to manufacturers of energystoragedevices, such as batteries and fuel cells, say sources close to the company.
Applied also wants to sell equipment to manufacturers of organic light emitting diodes (OLEDS), which are thin films that generate light. A sheet of OLED lights, for instance, could turn a wall or a window into a light source. Several companies – like Universal Display and Kodak – are trying to work out the technological kinks to bring OLED lights to market. The company is one of the charter members of the European OPAL 2008, which aims to develop cheap OLED lights. Other members include Aixtron, Osram, Philips (the world's biggest light maker) and BASF.
The company did not return calls for comment.
The push follows a rapid, visible and aggressive push into solar. Nearly three years ago, Applied formally entered the market for solar equipment. Now, it builds complete, turnkey solar factories for Signet Solar and Masdar PV, the solar conglomerate financed by Abu Dhabi. Applied customers will have around 278 megawatts of cap acity in the ground by the end of this year and the figure is expected to climb to 4.2 gigawatts by 2012 (see Siget Solar, or How the Chip Industry Will Colonize the Solar Business and Abu Dhabi's Masdar to Get Into Solar With Help From Applied Materials).
Applied's modus operandi will likely follow the script it has followed for decades when it is branching into new markets. That is, it will largely focus on markets and customer segments that rely heavily on chips or thin films and thus might need to buy, let's say, lots of chemical vapor deposition chambers. It will then hire and acquire to gain scale.
While the push into these markets will require exacting engineering and research, Applied will be able to leverage lots of existing know-how. Solid-state lights are essentially semiconductors or emissive films. Batteries and fuel cells, meanwhile, consist of metallic films and membranes.
The solar push could be particularly instructive. In 2006, Applied formally entered solar by snapping up Germany's Applied Films, an established equipment maker. Later that year, Applied Ventures, the VC wing of the company, invested $3 million in the silicon-ingot-maker Solaicx (see CNET story). During that same year, the company hired Charlie Gay, a well-known and well-regarded solar expert. Soon after starting, Gay became a regular speaker for Applied at solar events.
Applied Ventures is already plunking money into storage and lights. It has invested in ClearEdge Power, which produces fuel cells for providing heat and electricity to homes, and Infinite Power Solutions, which makes thin, flexible lithium-ion batteries for RFID tags and wireless sensors. Conceivably, these batteries could be used to power the sensors that will be tacked onto appliances for smart grid deployments.
In lighting, one of the portfolio companies is Group IV Semiconductor, which is working on a high-brightness, energy-efficient solid-state light that will fit into standard sockets. Group IV, which has also received money from Khosla Ventures and Kleiner, Perkins Caufield and Byers, says it will bring down the cost of solid-state lights, a major problem. The company is managed by executives from both the lighting world and Nortel Networks. Telecommunications might sound like an odd place to look for lighting experts, but fiber optics rely on light.
It also has an investment in Plextronics, which makes printable circuits and semi-conductive polymers. These materials can be exploited to produce solar components, lights or components for consumer electronics. For solar lighting and energy efficiency, there is an investment in Sage Electronics, which is developing electrochromatic windows that get darker or lighter depending on the sun.
Sources say that the firm has made additional clean investments that aren't listed on the public portfolio Website.
Additionally, Applied Ventures has continued to invest in solar. Since Solaicx, it has put money into Fat Spaniel Technologies (software for monitoring solar system performance), Enphase Energy (micro-inverters) and SunEdison (solar power provider).
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