September 21, 2009 – Shifts among executive and organizational ranks at Applied Materials suggest new streamlining efforts, but also leave unanswered questions as to why.

In a nutshell, here’s how the multiple changes shake out:

• Tom St. Dennis, SVP/GM of AMAT’s Silicon Systems Group (SSG), resigns; Randhir Thakur promoted from SVP/GM of Display/SunFab solar group to head of SSG.
• Solar business (i.e., SunFab) moved from Flat-Panel Display (FPG) group to Energy and Environmental Solutions (EES) group, under Mark Pinto (who is also still overall company CTO).
• Charlie Pappis promoted to GM of global services, Manfred Kerschbaum becomes "chief of staff."
• Franz Janker named EVP of sales; also sales accounts to be realigned/structured to be embedded within business units.

The PR announcing the changes was short on reasons for moves of Tom St. Dennis (out) and Randhir Thakur (up) — which, of course, leads to speculation. Perhaps, as Caris & Co. analyst Ben Pang suggests, it’s a reactionary move to shore up flagging performance in the semiconductor equipment sector (notably etch and process diagnostics). "Historically, AMAT has used the downturns to gain share, but we see scant evidence of this during the current downturn," he noted.

The other big change is moving the SunFab business from the displays unit to EES. In the PR, Applied says putting the thin-film (SunFab) unit with the rest of its solar organization underneath EES will help "take advantage of increasing overlap in the crystalline silicon and thin-film solar markets and align more deeply on strategy, investments, and business development." Industry watchers will have to rethink their outlooks on the individual AMAT units — presumably up for EES and down for FPD which loses a high-growth chunk of business. And those efficiencies in EES might be sorely needed — the company admitted in its 2Q09 summary call with analysts that though it has been receiving SunFab signoffs from customers, it received no new SunFab contracts in the quarter. Goldman Sachs’ Covello (also cited by Forbes) noted that industry watchers remain "extremely skeptical" about the firm’s long-term success in the thin-film solar market.