Applied Materials

Applied Materials (Nasdaq – AMAT) is the leading provider of semiconductor capital goods equipment in the world. Only about a quarter of Applied’s business volume comes from North America and Europe combined. The vast majority comes from Japan, South Korea and the Asia-Pacific zone. Applied has four business segments: 65 percent of revenues come from the Silicon segment (equipment for chip fabrication and particle deposition processes); 23 percent from wafer Fab Solutions (clean room and robotics equipment); 10 percent from Display (equipment used for TV flat panel displays, computer displays, etc.); and the balance from Energy and Environmental Solutions, including photovoltaic solar cells and energy-efficient glass.

Applied Materials has made a long-term strategic decision to become a force in solar power equipment, and has used acquisitions to penetrate the business. Most recently, Applied paid approximately $475 million to purchase HCT Shaping, a privately held Swiss manufacturer of wire saws used to slice silicon wafers. Applied’s efforts were rewarded in March when it won a multi-year $1.9 billion contract to supply equipment for multiple solar panel factories overseas.

Applied has a strong environmental management system and comprehensive reporting. It has detailed disclosure of greenhouse gas emissions, having reduced emissions 50 percent normalized to revenues from 2002 to 2004. AMAT is developing an Environmental Value Systems Analysis with the University of California, Berkeley to assess the environmental costs of owning and operating semiconductor fabrication tools with the goal of establishing market value for cost-saving eco-efficient product design and operation. Between 2002 and 2004, it cut hazardous waste by 43 percent and increased recycling of non-hazardous waste by 25 percent. A variety of products are used to significantly reduce greenhouse gases for clients including Remote Clean, a Plasma Exhaust Gas Abatement System, and a vacuum pump that reduces energy usage by 75 percent.

Applied Materials

3050 Bowers Avenue
PO Box 58039
Santa Clara, CA 95052-8039
Phone: 408-727-5555
www.appliedmaterials.com

PowerShares Global Clean Energy Portfolio (PBD)

The PowerShares Global Clean Energy Portfolio (PBD – AMEX) is a global clean energy exchange traded fund (ETF) that was launched in June. It is significantly more diversified than the PowerShares WilderHill Clean Energy Portfolio (PBW), which was launched in early 2005. That makes it the best single security for investors to gain exposure to the booming market for clean energy. The underlying index (the WilderHill New Energy Global Innovation Index – NEX) contains 87 stocks versus 43 in PBW. Because it is able to own shares of foreign companies that don’t trade on U.S. exchanges, PBD offers a much more comprehensive picture of the clean energy marketplace. Germany and Japan have been major players in clean energy development, with Spain rapidly joining the top ranks.

PBD includes companies focused on the generation and use of cleaner energy, conservation, and efficiency. WilderHill divides the sector into the following categories: demand side energy savings (8 percent of sales), generation efficiency and smart distribution (6 percent), hydrogen and fuel cells (4 percent), power storage (2 percent), solar (23 percent), wind (27 percent), biofuels, biomass and waste-to-energy (12 percent), renewables-other (11 percent), and services and suppliers (7 percent).

Keep in mind that the clean energy space remains volatile, responding to overall energy prices, public policy, and the movement of global equity markets. So PBD is likely to see its share of sharp ups and downs.

www.powershares.com