Intel Plugs Into Solar Power

SAN FRANCISCOIntel(INTC) is joining the growing ranks of chipmakers with solar energy aspirations, announcing the spinoff of its key photovoltaic assets into a new standalone company Monday.

Intel's investment arm, Intel Capital, will lead a $50 million funding round in the new company, to be called SpectraWatt. Goldman Sachs subsidiary Cogentrix Energy will also pitch in on the deal, along with a couple of other investors.

The company is expected to begin shipping products by mid-2009, with construction of a new manufacturing facility in Oregon slated for later this year.

Earlier Monday, IBM(IBM) announced a partnership with Japan's Tokyo Ohka Kogyo, a semiconductor manufacturing equipment firm, to develop low-cost methods for producing solar energy products.

The solar energy business has attracted interest and investments from numerous semiconductor companies, drawn by the growing market for alternative energy sources and the overlap between the technology and materials used in the chip and photovoltaic industries.

Cypress Semiconductor(CY)owned 52% of SunPower's(SPWR) outstanding shares, as of March 30.

Applied Materials(AMAT), the world's No.1 maker of semiconductor manufacturing tools, is pouring resources into a new business group dedicated to building and maintaining solar panel factories.

While many of Applied Material's chip equipment peers have seen their stock languish amid weak demand for semiconductor manufacturing equipment, shares of Applied Material are up roughly 27% since January thanks to the expectations for its nascent solar business.

Intel said that SpectraWatt will manufacture and supply photovoltaic cells to "solar module makers," while focusing on manufacturing improvements that lower the cost of solar energy generation.