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Fueling the Solar Energy Boom

Applied Materials, a leader in chipmaking equipment, is ramping up on solar-panel machines and counting on European regulations for business

Europe has set an ambitious target to obtain 20% of its energy from renewable sources by 2020. Trouble is, even if only one-quarter of it comes from the sun, that much power will require enough solar panels to generate 200 gigawatts of electricity. That's a tall order—some 25 times the current annual production of solar panels around the world. Clearly, manufacturing volumes have to jump, or Europe's green energy target will be out of reach.

Help is on the way from an unlikely source: Silicon Valley's Applied Materials (AMAT), the world leader in chipmaking equipment. For 40 years, Applied Materials has been producing high-precision manufacturing gear for semiconductors and flat-panel displays; now it's racing to sell specialized machines that churn out solar panels more cheaply and in higher volumes than ever before.