Aug. 3--As some of Silicon Valley's biggest tech companies -- especially chip makers -- have recognized the enormous potential in the solar industry, the battle for supremacy is taking on David vs. Goliath proportions.

So far, dozens of small, venture-backed solar start-ups -- many based in the valley -- have been in the spotlight.

But companies such as Intel, Applied Materials and National Semiconductor intend to capture their share of the lucrative market. After all, these large players aren't content to let start-ups control a photovoltaic solar industry projected to grow from $20 billion in 2007 to $74 billion by 2017.

It's unclear who will win.

"That's the great question, the $64,000 question," said Suvi Sharma, chief executive of Solaria, a start-up in Fremont. "The jury's still out."

Tom Werner, the CEO of SunPower -- who still refers to his company that's approaching $1 billion in annual revenue as a start-up -- agrees.

"The competitive dynamic is going to be real interesting," he said. The San Jose solar-panel maker was bought by Cypress Semiconductor and then spun out in 2006.

While the biblical battle involved a rock, this one is about sand.

'A natural step'

The process of manufacturing silicon to make semiconductors -- used in everything from personal computers to cell phones -- also is used to make solar panels. So big tech's move to solar is "a natural step" in the

evolution of the industry, said Erik Straser, who heads the clean-tech portfolio at Mohr Davidow Ventures in Menlo Park.

As they have in other market segments, the big players will need to ramp up manufacturing and expand distribution channels to propel solar energy. With their sheer size, access to huge amounts of capital and world-class research and development, it shouldn't be difficult.

"It takes a market of tens of billions (of dollars), as solar is now, for these guys to get excited," said Straser, who has the start-up Nanosolar and two other solar companies in Mohr Davidow's portfolio. "They believe that they need to be in this business."

And big companies could be "the exit opportunity" for the start-ups. "I'm not saying it's going to happen," Straser said, "but it has happened historically."

The industry has a bright future. The increasing demand for energy, sky-high oil prices -- coupled with concern over the environmental impact of fossil fuels -- already has pushed solar energy's phenomenal growth.

Still, observers say solar energy remains in its infancy -- currently solar produces about 0.1 percent of U.S. electricity -- so there's plenty of room for many players for many years to come. A recent study by Clean Edge and Co-op America said solar could provide 10 percent of the nation's power by 2025.