Apr. 7--In a major blow to Applied Materials, the Santa Clara company has disclosed that the $1.9 billion solar panel deal it announced early last year has been trimmed back to just $250 million because of the soured economy.

Applied's stock value dropped 95 cents, or more than 8 percent, to $10.60 in early trading today.

The world's biggest manufacturer of equipment for making semiconductors, Applied also has been eager to branch out by providing equipment to make solar panels. And the $1.9 billion deal it announced March 4 with an unnamed buyer, which analysts speculated was for a huge solar manufacturing project in Suzhou, China, was hailed at the time as the biggest solar-sales agreement ever signed.

But the worldwide recession, which has ravaged a number of industries, also has slowed the solar-panel business. Applied's deal had to be significantly scaled back "in light of the subsequent deterioration in global economic and financial market conditions," the company said in a filing late Monday with the U.S. Security and Exchange Commission.

Applied said it and the unnamed buyer "will continue to explore additional business opportunities," hinged largely on the future availability of financing the economy.

Contact Steve Johnson at sjohnson@mercurynews.com or 408-920-5043.

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