By David Lammers

Wafer-level packaging and 3D NAND are two market drivers that will propel revenues at the combined Lam-Novellus operation this year and next, chief operating officer Tim Archer said.

In a conference call following release of Novellus Systems’ fourth quarter and full-year 2011 results, Archer was asked if he stood by earlier predictions that Novellus’s revenues would reach the $2 billion level in the next two years, up from about $1.35 billion last year.

“2013 will be a strong year for wafer front end (WFE) investments overall, and in our case we will see a payoff from our focus on the 3D packaging space. WLP represents $700 million in new SAM (served available market) and already we are seeing tremendous growth in the copper electroplating segment. And we are still a strong believer that 3D NAND will begin to take off in 2013,” Archer said.

As memory companies build NAND devices with 16 to 32 layers of NAND memory cells, Novellus will be able to sell more plasma-enhanced CVD and dry strip tools, he said. Tungsten back fill is another area of opportunity.

“When we compare 2D to 3D NAND, the Novellus opportunity grows by about 30 percent at the same bit growth rate, according to our analysis,” Archer said.

Throughout the conference call, various stock analysts congratulated CEO Rick Hill on his 19 years of service at Novellus. Hill said while the merger between Lam and Novellus is likely to be completed in the second quarter, another Novellus conference call is unlikely. As Hill departs, Lam Research CEO Martin Anstice will lead the combined company, with Archer serving as the COO.

Hill said he is more optimistic about capital spending in 2012 than most other CEOs and industry analysts. While foundry investments will remain relatively strong in the first half, Hill said he is optimistic about a recovery in NAND-related investments in the second half of the year, partly because Ultrabook-style computers will rely more heavily on solid-state disk drives. Also, he said China will begin to invest in leading-edge semiconductor production, moving quickly forward with a “major thrust at the leading edge, which they are quite capable of doing.”

Governments in Europe and the United States will continue to stoke their economies in 2012. “This is an election year, and money will be stuffed in because leaders are worried about deflation,” Hill said.

While Novellus’ 2011 revenues were identical to 2010 revenues, at $1.35 billion, Hill said the company earned an all-time-high earnings per share of $3.20. Bookings in Q4 were $286.9 million, up $60 million (26.4 percent) from Q3 2011 bookings of $226.9 million.

Tags: 3D NAND, China, Lam Research, Novellus Systems, wafer-level packaging, WLP

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