Applied Materials at Piper Jaffray Second Annual Solar & CleanTech Symposium - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

JESSE PICHEL, ANALYST, PIPER JAFFRAY: Next up is Applied Materials. We're very happy to have Charlie Gay, who is Vice President and General Manager of Applied's solar group. Charlie founded about six solar companies, and for me he's a wonderful reference source for technologies and just for understanding solar in general. I encourage you to go to the breakout session and ask Charlie questions. He's phenomenal.

CHARLIE GAY, VP AND GENERAL MANAGER, SOLAR BUSINESS, APPLIED MATERIALS, INC.: Thanks a lot, Jesse. Good afternoon, everybody. I'm here to talk about what we're doing at Applied Materials and give you an overview. First I have the usual disclaimer, since we're a public company.

Applied Materials' company vision is that we apply nanomanufacturing technology to improve the way people live. When I joined Applied Materials one year ago, I felt like I was walking right into the sweet spot of the opportunity. I was hired by Applied Materials to set up the solar group.

Applied Materials is a company with annualized revenues on the order of $10 billion; about 14,000 employees around the world. This year we'll be celebrating our 40th anniversary of providing equipment to companies who manufacture integrated circuits. You can find Applied Materials equipment in every semiconductor integrated circuit fab around the world today.

And Applied Materials looked at solar as the next growth and business opportunity for taking the competencies and building equipment from the IC space to another semiconductor application, making photovoltaics, and providing the after-sales service and support that goes with that. Of Applied Materials revenues, over half are associated with equipment, and a very large fraction, on the order of a quarter or so, are related to sales and service. So not only do we provide equipment, but we help our customers keep it running and operating 24/7.

Our history sort of goes from working with transistors. Back in 1974 the cost of a transistor was about $0.10. Today it's measured in nanocents. And if you were to think about the cost of an iPod today, it would be about $3.2 billion. So, that factor of 20 million cost reduction has come from going down the learning curve, taking the experiences of manufacturing and bringing them home as scale has grown.

Applied Materials also generates a significant amount of its revenues from the flat-panel display business. About a decade ago, a joint venture was created with Komatsu called AKT, Applied Komatsu Technologies, now known as AKT, a 100% fully owned subsidiary of Applied Materials.

For all of us in the room who have spent a lot of our careers making solar panels, a real humbling statistic is that back in 2005 there were about 25 million square meters of flat-panel displays, big-screen TVs, sold, compared to about 15 million square meters of solar modules, almost twice as many televisions and computer monitors per unit area as are sold today in the solar industry.

So, one of the interesting things that has happened and caused a company like Applied Materials to get interested in photovoltaics is that the family of equipment used to make large-area displays -- typically today, a piece of glass that is used to make a display is about the size of a garage door. Roughly 55 square feet. You get about six big screen TVs out of one piece of glass. That same set of tooling is directly applicable in the large-volume, large-scale manufacturing of photovoltaics. So, our business approach has been to follow this logical extension of taking the manufacturing experience, going down the learning curve from making transistors, scaling that up to ever-larger areas, and taking the same kinds of processes that worked on small areas to large area, and being able to apply that in the solar space.

There are a variety of projections about how fast the market will grow. We look at this as an indicator of what's possible as large companies, companies like Applied Materials entering the space -- for me, after having spent more than 30 years, …