OFF TOPIC: NVLS
<<<An interview with Novellus Systems' Richard S. Hill
9/25/2000 Richard S. Hill joined Novellus Systems Inc. in 1993, as CEO and a member of the company’s board of directors. He was named chairman in May 1996. He came to the company from Tektronix, where he spent 12 years in various executive roles, including president of Tektronix Development company, vice president of the test and measurement group, and president of Tektronix Components Corp. He received a bachelor’s degree in engineering from the University of Illinois and an MBA from Syracuse University. The Wall Street Transcript, a Semiconductor Online content partner, interviewed Hill about the current state and the future of the company.
TWST: Could we start with a quick update on Novellus Systems and the current state of business development at the firm?
Mr. Hill: Business is great. It hasn't been this good for a couple of years, as everyone knows. All the investment we made in R&D during the downturn has resulted in a product portfolio that's allowing us to grow more rapidly than anybody in the industry.
TWST: What particular segments of the product portfolio are heading the charge at this point?
Mr. Hill: Dielectrics are clearly the strongest area of growth. As we've introduced new products ' for example, the VECTOR_ series ' as well as enhancements to our HDP product line, we've continue to gain market share and benefit from the rapid expansion of capacity in the semiconductor industry.
TWST: As you look out over the next year or two, are there any new technologies coming down the pike that may challenge what you're doing or make it more difficult?
Mr. Hill: There are always potential dislocations in high technology businesses, but to the best of our knowledge, low-K dielectrics and copper are the two biggest fundamental technological shifts in the semiconductor industry. They're going to carry us for about the next three to five years. So we don't see any major shifts in technology that Novellus isn't either leading in or driving toward that would affect our potential going forward.
TWST: As you look at the market over the next year or two, where do you see the biggest opportunities? Is it more of the same or are there some new things on the horizon?
Mr. Hill: For Novellus the opportunity is deposition, deposition and deposition. If we can continue to improve the quality of our films, as well as constantly lower the cost of ownership of our systems, we can continue to grow this business with just the existing product portfolio to well in excess of $2 billion. We think that's a pretty big opportunity for a company that just a few years ago was only hundreds of millions.
TWST: What are your longer-term goals for Novellus?
Mr. Hill: Probably the single most important goal for us as a company is to be recognized by our customers for providing the highest quality, highest performance equipment they can get anywhere in the world. I think that's our first and foremost goal. As we introduce new products, we want to be able to lower our overall costs to the customer. That will make our customers want to do business with Novellus, while also allowing us to continue to grow. So I think our ultimate goal is to create a culture and a business that allows us to introduce new products that people immediately want to buy, simply because of our reputation. I don't think we're very far from having that reputation in the deposition arena. What we'll want to do next is to expand what we're known for to areas outside the deposition process.
TWST: Are there any areas that need to be strengthened at this juncture?
Mr. Hill: We're always looking for better and brighter people to join the ranks of Novellus. Anybody who knows someone who wants to be on a winning team, just send them our way.
TWST: In that context, how are you doing retaining people in this tough labor environment?
Mr. Hill: One of the things that we're trying to be is proactive and go out and continually assess where we are competitive. But in addition to that, I think that when you look at the culture at Novellus, it really attracts people that believe that you're rewarded for your knowledge, skills and ability. We've created a culture here where it doesn't matter where you are in the organization or where you were born, your color, your race, or your creed'you have the ability to succeed at Novellus. I think that's the kind of environment people want to come to in this day and age.
TWST: How do you feel about the value the market is currently putting on your company?
Mr. Hill: I have never met a CEO that isn't a little frustrated with the vagaries of the market. Certainly the volatility of the semiconductor capital-equipment industry is second to none in the marketplace. And certainly, when you look at the opportunity and long-term growth of the industry as a whole, as well as the track record of a company like Novellus, you question the relative multiples between Novellus and some of the other competitors. But overall in the long run, I think if we continue to grow our earnings, the stock market will reflect the value.
TWST: Are you being held back by the recent disinterest in semiconductor stocks or concerns?
Mr. Hill: I think people tend to not understand the semiconductor industry. I think there are too many people out there that are trying to play the semiconductor industry like it's a roulette wheel, as opposed to a significant investment opportunity. There are more momentum players in the industry than there are investors. But I think anybody who puts his or her money in the semiconductor industry for the long term is going to win. Picking the winners is a function of picking the companies that have key technologies and have demonstrated an ability to be able to manage profitably in good times and bad. And I think if you look at any company across the spectrum, Novellus would have to be one of your top picks for a place to put your money in the semiconductor industry.
Edited by Andrea King
Associate Editor, Semiconductor Online
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