The world’s biggest supplier of solar-manufacturing equipment has opened a research and development center in China, and its chief technology officer will relocate from Silicon Valley to that country next month. Applied Materials, founded in 1967 as a semiconductor company, has manufactured in China for 25 years, but is expanding its presence to be closer to its customers and develop products suited to the country’s urban population.
“We’re doing R&D in China because they’re becoming a big market whose needs are different from those in the U.S.,” says Mark Pinto, Applied Materials’s CTO. Going forward, he says, “energy will become the biggest business for the company,” and China, not the U.S., “will be the biggest solar market in the world.”
Indeed, the move by Applied Materials is just the latest sign that China is rapidly moving to the forefront in adopting renewable energy technologies. China is no model for addressing climate change–its greenhouse-gas emissions are expected to nearly double by 2030. The lion’s share of demand for photovoltaics comes from Europe, which accounted for 82 percent of the photovoltaics sold in 2008, according to a report by Solarbuzz. China currently makes up less than 1 percent of the demand for photovoltaics, but its demand for photovoltaics is expected to grow; Beijing aims to produce 20,000 megawatts of solar energy by 2020.
One factor in the move by Applied Materials is that China offers manufacturing incentives that aren’t available for solar companies in the U.S. The tax credits in the federal stimulus package that passed in February were one of the first such incentives in a long time, says Pinto. But, he adds, “The location of factories of the kind we make isn’t driven by cost.” He lists the considerations that led to the company’s expansion in China: “Where does the product get consumed, what is the cost of shipping, and what incentives does the government offer?” At the research center in Xi’an, a large city home to many universities, Applied Materials will work with local customers and researchers to develop new products.
Applied Materials, the world’s largest maker of semiconductor- and display-manufacturing equipment, entered the solar market in 2006. In doing this, it built on its expertise in equipment for making large films of silicon, the material on which both display circuits and solar cells are based. By 2008, the company became the world’s largest photovoltaic-equipment supplier.