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Novellus Q3 2007 Earnings Call Transcript

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2007-10-23 16:37:46.0

Tags: Novellus Systems Inc.

Question-and-Answer Session

Operator

(Operator Instructions) We’ll take our first question from Robert Mayer with Robert W. Baird.

Robert Mayer - Robert W. Baird

On orders, are we supposed to read into this that this is sort of the bottom of the cycle or work orders from the quarter pushed into December quarter or maybe if you could give more detail on that?

Richard S. Hill

Well I think that this quarter tended to be worse than we expected at the beginning of the quarter I do think there is some shift from the third quarter into the fourth quarter but I do see that we are beginning to really fully utilize a lot of the capacity that’s out there which I think is going to augment the growth in orders.

Robert Mayer - Robert W. Baird

Okay so that kind of fits the definition of being at the bottom quarter right there.

Richard S. Hill

I always like to hope so; hope springs eternal Robert.

Robert Mayer - Robert W. Baird

Okay, very good thanks and congratulations.

Operator

And we’ll go next to Satya Kumar of Credit Suisse.

Satya Kumar - Credit Suisse

I just want to get a sense of what you’re seeing n terms of demand from your current customers. Are you waiting to see that situation over the next few weeks?

Richard S. Hill

If I remember the mid-quarter call correctly, I mentioned the fact that I would be visiting with my customers shortly after the call itself. And I’ve done that and they are relatively optimistic at the opportunities for memory going forward.

Satya Kumar - Credit Suisse

So does that mean that your outlook was more positive when you came back?

Richard S. Hill

Well I’d like to comment on what I commented on earlier that by looking at the underlying demand for memory, both flash and D-RAM and I looked beyond my customers to their customers, I think strong computer demand which we continue to see come out of the marketplace, which I don’t think comes out clearly enough, is both consumer driven and industrial driven - bodes well. And in addition to that, I think there is an increasing use of flash and different applications that I highlighted that will show particular strength during the holiday season and I expect that to continue. And so based on all the data I see short of the collapse in the financial market, things look to be pretty solid.

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