The market for solar equipment such as photovoltaic solar panels and their components is heading for a glut in 2010. That is pretty much the conventional wisdom about the prospects for solar equipment next year.

That makes sense on one level. Demand is expected to be no better than flat, which will reduce growth in the solar sector. But a few players may do better than that, and these are the companies that supply equipment to make PV solar cells.

One such company, Amtech Systems (ASYS) recently got a boost from an analyst predicting that the company’s solar cell-making equipment would enjoy higher demand as the module makers race to manufacture cells to make the predicted glut a reality.

Amtech is a very small player in this field. The company’s market cap is just $72 million, compared with market caps of about $18 billion for Applied Materials (AMAT) and KLA-Tencor (KLAC) of $6 billion.

A Taiwanese-based company, Amtech sells about half its equipment to Chinese and Taiwanese customers. Less than 20% of revenue comes from the U.S. The company’s top 10 customers account for 62% of revenues, with the leader accounting for just 16%.

What, then, are Amtech’s prospects as a weapons dealer to solar module makers? First Solar (FSLR) has upped its estimate of 2010 sales to a range of $2.7 billion-$2.9 billion and expects to boost capacity by 424 megawatts at a capital cost of $365 million.

Solar wafer maker ReneSola (SOL) shares also got a boost from a rating improvement from Morgan Stanley, with a new share price target of $6.60. The analyst expects ReneSola to gain market share at the low-priced end of the market.

Yingli Green Energy (YGE) has raised its estimate of shipments for the fourth quarter of 2009. Yingli has built capacity to manufacture 600 megawatts of PV modules and expects to reach shipments of 490-500 megawatts for 2009. The company hasn’t announced any expansion plans yet for 2010, but such plans would not be a surprise.

Solar equipment companies like Amtech, Applied Materials and KLA-Tencor could do very well as module makers race to increase capacity. But overall improvement in the economy leading to increased demand for solar cells will drive PV makers’ expansion plans. And that improvement is still problematic.

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