Exhibit 99.1

Contacts:		William H. Kurtz		Robin Yim
		Executive Vice President and Chief Financial Officer		Investor Relations
		Novellus Systems, Inc.		Novellus Systems, Inc.
		Phone: (408) 943-9700		Phone: (408) 943-9700

FOR IMMEDIATE RELEASE

NOVELLUS SYSTEMS REPORTS THIRD QUARTER 2007 RESULTS

SAN JOSE, Calif., October 23, 2007—Novellus Systems, Inc. (NASDAQ: NVLS) today reported net sales and results of operations for its third quarter ended September 29, 2007. Net sales for the third quarter were $393.3 million, down $23.1 million or 5.5 percent from second quarter 2007 net sales of $416.3 million and down $50.8 million or 11.4 percent from third quarter 2006 net sales of $444.0 million. Net income for the third quarter was $49.7 million, or $0.41 per diluted share, down $7.6 million or 13.3 percent from second quarter 2007 net income of $57.3 million and down $20.3 million or 29.0 percent from third quarter 2006 net income of $70.0 million.

Bookings in the third quarter were $305.3 million, down 8.1 percent from second quarter 2007 bookings of $332.2 million. Shipments of $387.8 million in the third quarter represent a decrease of $48.6 million or 11.1 percent from $436.4 million reported for the second quarter. Deferred revenue at the end of the third quarter was $108.9 million.

Cash, cash equivalents, restricted cash and short-term investments as of September 29, 2007 were $1.0 billion, essentially unchanged from the second quarter.

The presentation of revenue on a shipments basis is not in accordance with U.S. generally accepted accounting principles (GAAP). However, we believe that this non-GAAP financial measure provides further insight into the results of operations and enhances the consistency and comparability of those results to results in prior periods because it assists shareholder understanding of the effects of certain charges and benefits on the quarter’s results.

“The results for this quarter were as expected. We continue to control our operating expenses during the current slowdown and to enhance our product portfolio,” said Richard S. Hill, Chairman and Chief Executive Officer. “In addition, we continued our stock buyback program throughout the quarter, retiring approximately 5% of the outstanding shares while maintaining a very strong balance sheet. We feel while the industry is currently in a state of flux, we are well positioned for the next upturn.”

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding (i) our belief that the non-GAAP financial measures will provide shareholders further insight into the results of operations and enhance the consistency and comparability of those results to results in prior periods and (ii) our plan to continue to control our operating expenses during the current slowdown and enhance our product portfolio, (iii) our belief that the semiconductor industry is currently in a state of flux and (iv) our belief that the Company is well positioned for the next upturn, as well as other matters discussed in this news release that are not purely historical data, are forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by such statements. These risks and uncertainties include, but are not limited to, the inability of the non-GAAP measures to provide shareholders further insight into the results of operations and enhance the consistency and comparability of those results to results in prior periods, unforeseen disruptions in production and manufacturing that may impact operating costs and our ability to invest in our product portfolio, inability to accurately predict the stability of the semiconductor industry; inability to accurately predict the Company’s ability to maximize its position within the semiconductor industry; and other risks indicated in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2006, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007 and our Current Reports on Form 8-K and amendments to such reports. Forward-looking statements are made and based on information available to us on the date of this press release. We do not assume, and expressly disclaim, any obligation to update this information.

About Novellus:

Novellus Systems, Inc. (NASDAQ: NVLS) is a leading provider of advanced process equipment for the global semiconductor industry. The Company’s products deliver value to customers by providing innovative technology backed by trusted productivity. An S&P 500 company, Novellus is headquartered in San Jose, CA with subsidiary offices across the globe. For more information please visit www.novellus.com.

NOVELLUS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended												Nine Months Ended
(In thousands, except per share amounts)		September 29				June 30				September 30				September 29				September 30
(Unaudited)		2007				2007				2006				2007				2006
Net sales		$	393,277			$	416,335			$	444,032			$	1,206,586			$	1,220,011
Cost of sales			198,970				208,225				217,507				609,260				621,182
Gross profit			194,307				208,110				226,525				597,326				598,829
%			49.4	%			50.0	%			51.0	%			49.5	%			49.1	%
Operating expenses:
Selling, general and administrative			67,420				72,011				67,664				206,531				192,457
Research and development			61,384				63,374				60,645				185,158				187,726
Restructuring and other charges			—				—				—				—				12,629
Legal settlement			—				—				—				—				3,250
Total operating expenses			128,804				135,385				128,309				391,689				396,062
%			32.8	%			32.5	%			28.9	%			32.5	%			32.5	%
Income from operations			65,503				72,725				98,216				205,637				202,767
%			16.7	%			17.5	%			22.1	%			17.0	%			16.6	%
Other income, net			8,933				14,597				9,574				34,637				23,264
Income before income taxes and cumulative effect of a change in accounting principle			74,436				87,322				107,790				240,274				226,031
Provision for income taxes			24,725				29,977				37,770				79,435				79,537
Income before cumulative effect of a change in accounting principle			49,711				57,345				70,020				160,839				146,494
Cumulative effect of a change in accounting principle, net of tax			—				—				—				—				948
Net income		$	49,711			$	57,345			$	70,020			$	160,839			$	147,442
Net income per share:
Basic
Income before cumulative effect of a change in accounting principle		$	0.41			$	0.46			$	0.57			$	1.31			$	1.16
Cumulative effect of a change in accounting principle, net of tax			—				—				—				—				0.01
Basic net income per share		$	0.41			$	0.46			$	0.57			$	1.31			$	1.17
Diluted
Income before cumulative effect of a change in accounting principle		$	0.41			$	0.45			$	0.57			$	1.28			$	1.15
Cumulative effect of a change in accounting principle, net of tax			—				—				—				—				0.01
Diluted net income per share		$	0.41			$	0.45			$	0.57			$	1.28			$	1.16
Shares used in basic per share calculation			120,414				123,788				122,150				122,730				126,125
Shares used in diluted per share calculation			121,902				126,630				123,357				125,244				127,177

NOVELLUS SYSTEMS, INC.
RECONCILIATION OF THE STATEMENTS OF OPERATIONS
(EXCLUDING CERTAIN CHARGES AND BENEFITS) (1)

		Three Months Ended												Nine Months Ended
(In thousands, except per share amounts)		September 29				June 30				September 30				September 29				September 30
(Unaudited)		2007				2007				2006				2007				2006
Net income excluding certain charges and benefits:		$	49,711			$	57,345			$	70,020			$	160,839			$	156,260
Restructuring and other charges			—				—				—				—				(12,629	)
Legal settlement			—				—				—				—				(3,250	)
Cumulative effect of a change in accounting principle			—				—				—				—				1,542
Total charges and benefits			—				—				—				—				(14,337	)
Tax effect of the above charges and benefits			—				—				—				—				5,519
Net income		$	49,711			$	57,345			$	70,020			$	160,839			$	147,442
Net income per diluted share excluding certain charges and benefits:		$	0.41			$	0.45			$	0.57			$	1.28			$	1.23
Restructuring and other charges			—				—				—				—				(0.10	)
Legal settlement			—				—				—				—				(0.03	)
Cumulative effect of a change in accounting principle			—				—				—				—				0.01
Tax effect of the above charges and benefits			—				—				—				—				0.05
Net income per diluted share		$	0.41			$	0.45			$	0.57			$	1.28			$	1.16

NOVELLUS SYSTEMS, INC.
SCHEDULE OF SHARE-BASED COMPENSATION

		Three Months Ended												Nine Months Ended
		September 29				June 30				September 30				September 29				September 30
(In thousands)		2007				2007				2006				2007				2006
(Unaudited)		(1)				(2)				(3)				(1)				(3)
Cost of sales		$	543			$	565			$	400			$	1,619			$	1,246
Selling, general and administrative			6,674				5,248				5,516				17,619				16,545
Research and development			2,987				3,107				2,741				8,989				8,466
Total share-based compensation expenses			10,204				8,920				8,657				28,227				26,257
Benefit from income taxes			3,449				2,080				3,333				7,805				10,109
Net share-based compensation expenses		$	6,755			$	6,840			$	5,324			$	20,422			$	16,148

NOVELLUS SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

		September 29,				December 31,
		2007				2006
(In thousands)		(Unaudited)				*
ASSETS
Current assets:
Cash and short-term investments		$	857,462			$	853,328
Accounts receivable, net			362,259				310,888
Inventories			231,271				198,571
Deferred taxes and other current assets			123,004				142,506
Total current assets			1,573,996				1,505,293
Property and equipment, net			333,733				364,599
Restricted cash			151,003				143,769
Goodwill			235,753				225,431
Intangible and other assets			124,275				123,400
Total assets		$	2,418,760			$	2,362,492
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	286,825			$	254,125
Deferred profit			57,614				41,351
Income taxes payable			27,714				38,879
Current obligations under lines of credit			7,685				19,480
Total current liabilities			379,838				353,835
Long-term debt			137,662				127,862
Other liabilities			68,411				46,090
Total liabilities			585,911				527,787
Shareholders’ equity:
Common stock			1,370,752				1,393,914
Retained earnings and accumulated other comprehensive income			462,097				440,791
Total shareholders’ equity			1,832,849				1,834,705
Total liabilities and shareholders’ equity		$	2,418,760			$	2,362,492

*

The December 31, 2006 condensed consolidated balance sheet was derived from our audited consolidated financial statements.