A solar cell manufactured by Spectrolab Inc. has set a world record for its efficient conversion of sunlight into electricity, prompting the Sylmar company to increase its local production capacity and hire more workers.

Spectrolab, a subsidiary of Boeing Co. that manufactures solar cells, solar panels and high intensity searchlights, was able to convert 41.6 percent of concentrated sunlight into electricity during testing at the Department of Energy's National Renewable Energy Laboratory in Golden, Colo. It broke a record of 41.1 percent held by the Fraunhofer Institute in Munich, Germany.

A half-percent increase in efficiency is considered huge in the industry, and the new...