Novellus Victorious in Semitool Patent Infringement Case.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--March 27, 2000

Novellus Systems Inc. (Nasdaq: NVLS), the productivity and innovation leader in thin film deposition technology for the global semiconductor industry, Monday announced that it has won a summary judgment against Semitool Inc. (Nasdaq: SMTL) in a patent infringement lawsuit filed by Semitool on Aug. 10, 1998. Semitool's lawsuit alleged that Novellus' SABRE(TM) and SABRE xT(TM) copper deposition systems infringed upon two Semitool patents.

In an order filed March 17, 2000, U.S. District Judge D. Lowell Jensen granted Novellus a summary judgment, ruling that the Novellus systems did not violate the Semitool patents. Novellus intends to seek its attorneys' fees from Semitool, on the grounds that Semitool had no basis for bringing this suit against Novellus.

"The judge has verified our original claim; that is, that the Semitool suit has no merit or bearing on our copper electrofill tools," said Novellus Chairman and Chief Executive Officer Richard S. Hill. "When introduced, Novellus' SABRE tool was the first system in our industry to allow chipmakers to electrodeposit copper interconnects in a manufacturing environment. The Semitool patents contained no reference to copper or electroplating technology, and were based on Semitool systems for liquid and vapor etching. We found it interesting that Semitool filed the lawsuit shortly after the debut of Novellus' copper electrofill SABRE system at SEMICON West in 1998. Semitool's strategy to use this lawsuit to create uncertainty about intellectual property rights in the new emerging copper market has failed. Novellus has demonstrated to the courts, as well as our customer base, the uniqueness of our SABRE copper electrofill system."

Novellus introduced SABRE, its first generation copper electrofill tool in June 1998, and quickly followed a year later with SABRE xT, its second-generation tool. Novellus' SABRE systems play a critical role at major chipmakers' facilities around the world, successfully depositing void-free copper in the smallest design features while providing superior fill and uniformity performance. Novellus' copper electrofill tools have a lead market share over competing copper deposition systems, with Novellus holding approximately 60 percent of the world's market for copper electrodeposition systems.

"According to industry analyst figures from Dataquest, the demand for copper electrofill equipment is expected to grow from $61 million in 1998 to $513 million in 2004. Novellus is in a superior position to provide chipmakers with the copper process systems needed for their successful competition in the marketplace," continued Hill. "SABRE has proven its superior production capabilities in commercial applications."

About Novellus Systems

Novellus Systems Inc. manufactures, markets and services advanced systems for the deposition of thin films on semiconductor wafers. The company's products are designed for high-volume production of advanced, leading-edge semiconductor devices at the lowest possible cost. With headquarters in San Jose and subsidiaries in the United Kingdom, France, Germany, The Netherlands, Spain, China, Japan, Korea, Singapore and Taiwan, Novellus is a publicly traded company on the Nasdaq stock exchange (Nasdaq: NVLS). Additional information about the company is available on Novellus' home page on the World Wide Web, located at www.novellus.com.