Micrel, Inc. (MCRL)

[analogdog]

Micrel Enters Solar Market With Contract
Monday November 19, 9:50 am ET
Micrel Enters Solar Market in Deal With Commercial Solar-Cell Company

SAN JOSE, Calif. (AP) -- Micrel Inc. signed a multimillion dollar contract with a solar company to produce solar cells, the semiconductor maker said Monday.

The company did not specify the amount of the contract or its partner.

Micrel will make the cells at its high-volume San Jose, Calif., factory.

Semiconductors and solar products both need polysilicon as a key feedstock. Micrel's entry into the solar market comes at a time when polysilicon prices have surged amid rising demand for solar products. Consumers and investors favor high-efficiency products because they produce more energy from fewer panels, and therefore less polysilicon.

At the same time, the semiconductor industry has a surplus of capacity, which has hurt prices and profits.

"This new agreement enables Micrel to provide valuable energy-saving solutions while offsetting current capacity," Guy Gandenberger, Micrel's vice president of wafer fab and foundry operations, said in a statement.

Micrel shares rose 46 cents, or 5.6 percent, to $8.69 in morning trading.