原创 A view on on the Lam-Novellus deal

"I have been joking for five years that this merger would happen when Rick [Hill] and Steve [Newberry] retire as you then have the egos out of the way and you can effectively merge the companies," said Dean Freeman, an analyst with market research firm Gartner Inc. "Looms like this is Steve and Rick's swan song," he added.

Newberry, the CEO of Lam Research Corp., was already set to step down as CEO on Jan. 1. Hill, chairman and CEO of Novellus Systems Inc., is apparently planning to retire after Lam's $3.3 billion, all stock acquisition of Novellus closes sometime early next year.

Freeman said rumors of a Lam-Novellus merger have been circulating the industry since 1992, but that he found it a bit surprising that it's actually happening. According to Freeman, Hill had been shopping Novellus to Tokyo Electron Corp., but the company's valuation was too high for TEL's taste.

A combined Lam-Novellus will give customers an alternative to Applied Materials Inc.'s through-silcon-via (TSV) process and result in a company that can create some synergy between the etch and deposition processes, providing more competition for Applied, Freeman said.

"As a whole I view it as an positive for Lam and Novellus, and[Applied] will need to step up their game to make sure they don't lose share," Freeman said.

With Lam's strengths in silicon etch and cleaning processes and Novellus' strengths in chemical vapor deposition and metallization layers, the merged company will have a complete TSV process with the exception of chemical mechanical planarization (CMP). Customers can turn to Applied or Ebara Corp. for CMP, Freeman said.

"Lam has always been strong in customer service and strong in product development," Freeman said. "If they can leverage this expertise to the Novellus side it could enable Novellus to see greater penetration in the memory space and with customers Novellus has shunned in the past."

Freeman also noted that Novellus does strong business at No. 1 chip vendor Intel Corp. This could provide a benefit to Lam, which has historically had trouble cracking the Intel account with its etch product, despite its technical superiority, Freeman said.

But Freeman said there could also be challenges associated with the acquisition. Lam has a culture of operational excellence, something the legacy Novellus employees will have to get used to, he said. Novellus has tended to be a company that avoids early R&D, instead waiting until a process hits production before jumping into the market, Freeman said.

Freeman also wondered if the merger could possibly divert Lam's focus from its core competency, etch.

Finally, Freeman said the acquisition could have an impact on several other chip gear vendors. ASM International NV, for example, would be isolated further by Lam's acquisition of Novellus, he said. He suggested that ASM International could be acquired by TEL.

"TEL has been looking for a merger," Freeman said. "Looks like this one [Novellus] got away."

Dylan McGrath

EETimes