Applied Materials (NASDAQ:AMAT) has based a long and illustrious business history on helping semiconductor makers make their semiconductors. Now that chip giants from Intel (NASDAQ:INTC) to Texas Instruments (NYSE:TXN) and everyone in between are cutting back wafer production, Applied is quickly becoming a solar panel specialist.

Check out the recent sales trends within Applied if you don't believe me:

Segment

Q1 2009 (million)

Q1 2008 (million)

Change

Silicon

$546

$1,237

(56%)

Global Services

$345

$595

(42%)

Display

$149

$133

12%

Energy

$293

$122

140%

"Energy and environmental solutions" is how Applied refers to its division that produces solar panels and related technologies. That segment has leapfrogged the display panel division to become the third-largest contributor to company revenue. What's more, the energy segment recorded $321 million in orders this quarter, making it the only segment with a book-to-bill ratio over 1.0 for the quarter. By new booked orders, energy is currently Applied's largest division. The display department saw just $26 million of new orders and will likely fall hard in the next quarter.

All told, though, Applied reported a $0.10 net loss per share on $1.33 billion in net sales, down from a $0.19 profit per share on $2.09 billion of revenue a year ago. Ouch -- that one's gonna leave a mark.

But it won't kill Applied. The company has $1.9 billion in liquid assets, a mere $203 million of long-term debt, and would be able to survive about 10 straight quarters of misery like this quarter's without cutting costs or raising capital. But even so, Applied is cutting costs to the tune of $400 million a year, including such drastic measures as shutting down factories for weeks at a time, cutting executive salaries, and killing their bonuses. And then there's that delicious energy segment.

The solar industry is maturing quickly, and it will need plenty of new manufacturing capacity in the coming years. As an example, LDK Solar (NYSE:LDK) recently signed a $220 million contract to install Applied's wafer production systems.

Smallish solar power players like Evergreen Solar (NASDAQ:ESLR) and Solarfun Power Holdings (NASDAQ:SOLF) haven't yet reached the scale where reliable profits start to materialize. That's where Applied fits in today; while its energy segment is rapidly growing, it's not yet profitable. But an industry giant like First Solar (NASDAQ:FSLR) can boast a 27% net margin, and its 0.9 PEG ratio makes it a relatively cheap stock even at 43 times trailing earnings. That's where Applied is heading in the long run.

I can certainly think of worse fates. Embrace your solar power, Applied. The sunshine is already trickling in.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.