Applied Materials Inc.'s (AMAT) $1.9 billion solar production equipment supply deal with a major customer has been reduced to $250 million as a result of deteriorating global economic and financial market conditions, according a regulatory filing late Monday.

The Santa Clara, California-based company had announced through a regulatory filing early last month that it had entered into sales agreements to supply its SunFab thin film tandem junction solar production equipment and related services to an unnamed privately-held company for an aggregate purchase price of about $1.9 billion.

However, Applied Materials said in the Monday filing that the parties have recently entered into an amendment of the original agreements that reduces the production capacity to be supplied by Applied Materials and reduces the aggregate purchase price to about $250 million.

Applied Materials also said in the filing that it has not recognized any orders in connection with the original agreement or the amended agreement and the companies continue to explore additional business opportunities.

Applied Materials, which is the world's biggest semiconductor equipment maker, has recently tried to offset the swings in demand for chip machinery by entering the solar-energy equipment market.

Sales from the company's energy and environmental solutions business, which include its solar business, jumped 140% to $293 million in the first quarter and constituted 22% of the quarter's total revenue of $1.33 billion.

In February, Applied Materials reported its first quarterly loss since 2003 after posting profit declines in seven consecutive quarters amid declining sales and deteriorating margins in a difficult semiconductor industry environment.

In November, the company announced plans to reduce its global workforce by about 12% or 1,800 positions by the end of fiscal 2009 as apart of a restructuring program designed to streamline the organization and reduce operating costs. The company expects the program to drive annualized cost savings of about $400 million, when completed.

Applied Materials shares are currently trading at $10.72, down 84 cents or 7.27%. The shares are trading in a 52-week range of $7.80 to $20.90.

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