Veeco Wants Some CIGS

Investors interested in solar energy can expect to hear a lot more in the coming months and years about high-performance thin-film solar cells made using copper-indium-gallium-selenide (CIGS).

The material has a great many advantages, including the possibility that because it can be deposited on just about any substance, it might be able to effectively convert building materials into functioning solar cells. Meaning, for instance, that a steel girder could double as a solar panel.

All of this background is just a long way of explaining that Veeco Instruments (Nasdaq: VECO  ) , the world's leading provider of high-metrology equipment, might stand to benefit from the solar industry's transition to CIGS-enhanced thin-film solar cells. Management recently announced that it was introducing a new line of production-scale thermal-deposition equipment dedicated to facilitating the transition to CIGS thin-film solar cells.

As I explained in this piece the other week, I expect thin-film solar cells to capture a larger share of the overall solar cell market in the coming years. Already, a number of companies -- Royal Dutch Shell (NYSE: RDS-A  ) , Honda (NYSE: HMC  ) , Ascent Solar Technologies (Nasdaq: ASTI  ) , United Solar Ovonic (a subsidiary of Energy Conversion Devices (Nasdaq: ENER  ) ), and Suntech Power (NYSE: STP  ) -- are either producing CIGS thin-film solar cells or are actively investigating the possibility of using this material instead of silicon. Moreover, a handful of very promising private solar start-ups -- including HelioVolt, Nanosolar, and Miasole -- are doing the same.

I am not yet ready to recommend Veeco's stock, but I'd encourage current and potential investors to keep an eye on this development. The company would benefit from both the additional revenue and the diversification of product line that would come with sales of the new equipment to thin-film solar manufacturers. It now is dependent on the more cyclical nature of the data storage, semiconductor, and telecommunications sectors it currently serves.

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Jack Uldrich is the author of two books on nanotechnology. He doesn't own stock in any of the companies mentioned in this article. The Fool has a disclosure policy.