To ALL: NEWS ON NVLS/VARIAN
Novellus acquiring Varian's thin film unit to enter PVD
SAN JOSE -- In a move to enter the $1.5 billion market for physical vapor deposition (PVD) equipment, Novellus Systems
Inc. here today announced it was buying the thin-film systems business of Varian Associates Inc. for $150 million in cash.
Varian's Thin Film Systems division manufactures and markets PVD equipment used to create interconnection layers on
advanced logic and memory chips. The acquisition, which is expected to be completed in about 45 days, complements
Novellus' existing activities in chemical vapor deposition (CVD) for dielectric insulators and metal conductor films in
semiconductor fabrication. The move also continues a consolidation trend in semiconductor capital equipment arena as
suppliers attempt position and reposition themselves for the next round of market growth in the coming year.
"This move expands our portfolio of important metal deposition technologies and gives Novellus a critical mass of talent to
aggressively compete for leadership in the device interconnect market," said Richard S. Hill, chairman and chief executive
officer of Novellus.
"With this acquisition, Novellus can provide customers with the entire set of deposition processes required for 0.25-micron
devices and below." Hill added. "The device interconnect market is undergoing dynamic change as customers strive to add
greater speed and functionality to their chips. This provides a significant market opportunity for a new strong competitor in
PVD. The thin film systems business has exciting new products in development for stand-alone and integrated applications,
which position the company well to capitalize on these opportunities."
Industry estimates place the market for PVD systems at $1.5 billion worldwide, and it is expected to double by the year 2000.
Increasing levels of metal interconnection on complex ICs are driving the need for more PVD thin-film deposition in wafer
fabs. In some cases, interconnect processing represents more than 50% of the steps in advanced chip fabrication. Novellus will
be going up against a number of PVD players, including Applied Materials Inc.of Santa Clara, Calif., and Trikon Technologies
Inc. (formerly Plasma & Materials Technologies Inc.) of Chatsworth, Calif.
"Varian has long been respected for its technology and engineering strength in PVD and has amassed a wealth of intellectual
property related to this area, both of which we intend to leverage," said John A. Chenault, Novellus executive vice president,
who will assume management of the acquired business.
Under terms of the agreement, Novellus will acquire all assets of Varian's Thin Film Systems unit, including its Palo Alto
manufacturing facility. The operation employs 450 people worldwide, who will become Novellus employees once the
transaction is completed. |
