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 SECOND QUARTER 2007 RESULTS

SAN JOSE, Calif., July 16, 2007—Novellus Systems, Inc. (NASDAQ: NVLS) today reported net sales and results of operations for its second quarter ended June 30, 2007. Net sales for the second quarter were $416.3 million, up $19.4 million or 4.9 percent from first quarter 2007 net sales of $397.0 million and up $6.3 million or 1.5 percent from second quarter 2006 net sales of $410.1 million. Net income for the second quarter was $57.3 million, or $0.45 per diluted share, up $3.6 million or 6.6 percent from first quarter 2007 net income of $53.8 million and up $4.6 million or 8.8 percent from second quarter 2006 net income of $52.7 million.

Bookings in the second quarter were $332.2 million, down 19.4 percent over first quarter 2007 bookings of $412.2 million. Shipments of $436.4 million in the second quarter represent an increase of $47.3 million or 12.2 percent from $389.1 million reported for the first quarter 2007. Deferred revenue at the end of the second quarter was $107.9 million, an increase of $18.5 million or 20.7 percent from $89.4 million at the end of the first quarter 2007.

Cash, cash equivalents, restricted cash and short-term investments as of June 30, 2007 were $1.0 billion, essentially unchanged from the first quarter 2007.

The financial measures set forth above that present revenue on a shipments basis and bookings, are not in accordance with U.S. generally accepted accounting principles (GAAP). We believe that these non-GAAP financial measures provide further insight into the results of operations and enhance the consistency and comparability of those results to results in prior periods because they assist shareholder understanding of the effects of certain charges and benefits on the quarter’s results.

“The second quarter revenues and earnings came in as expected, however bookings and shipments have come in at the low end of our guidance as some absorption of excess capacity is taking place. Despite the shortfall on our shipments we have continued to control expenses and have taken preemptive actions to improve operations,” said Richard Hill, Chairman of the Board and CEO. “Also, during the quarter we have announced several major new products that are targeted to deliver productivity gains our customers need to compete and win in the Semiconductor Industry.”

“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 belief that the introduction of several major new products will deliver productivity gains our customers need to compete and win in the Semiconductor Industry, 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 the introduction of new products into the market which are targeted to deliver productivity gains to our customers; 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 Report on Form 10-Q for the quarter ended March 31, 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												Six Months Ended
(In thousands, except per share amounts)		June 30				March 31				July 1				June 30				July 1
(Unaudited)		2007				2007				2006				2007				2006
Net sales		$	416,335			$	396,974			$	410,073			$	813,309			$	775,979
Cost of sales			208,225				202,065				205,309				410,290				403,675
Gross profit			208,110				194,909				204,764				403,019				372,304
%			50.0	%			49.1	%			49.9	%			49.6	%			48.0	%
Operating expenses:
Selling, general and administrative			72,011				67,100				66,311				139,111				124,793
Research and development			63,374				60,400				63,298				123,774				127,081
Restructuring and other charges			—				—				—				—				12,629
Legal settlement			—				—				—				—				3,250
Total operating expenses			135,385				127,500				129,609				262,885				267,753
%			32.5	%			32.1	%			31.6	%			32.3	%			34.5	%
Income from operations			72,725				67,409				75,155				140,134				104,551
%			17.5	%			17.0	%			18.3	%			17.2	%			13.5	%
Other income, net			14,597				11,107				7,611				25,704				13,690
Income before income taxes and cumulative effect of a change in accounting principle			87,322				78,516				82,766				165,838				118,241
Provision for income taxes			29,977				24,733				30,061				54,710				41,767
Income before cumulative effect of a change in accounting principle			57,345				53,783				52,705				111,128				76,474
Cumulative effect of a change in accounting principle, net of tax			—				—				—				—				948
Net income		$	57,345			$	53,783			$	52,705			$	111,128			$	77,422
Net income per share:
Basic
Income before cumulative effect of a change in accounting principle		$	0.46			$	0.43			$	0.42			$	0.90			$	0.60
Cumulative effect of a change in accounting principle, net of tax			—				—				—				—				0.01
Basic net income per share		$	0.46			$	0.43			$	0.42			$	0.90			$	0.61
Diluted
Income before cumulative effect of a change in accounting principle		$	0.45			$	0.42			$	0.42			$	0.88			$	0.59
Cumulative effect of a change in accounting principle, net of tax			—				—				—				—				0.01
Diluted net income per share		$	0.45			$	0.42			$	0.42			$	0.88			$	0.60
Shares used in basic per share calculation			123,788				123,979				125,124				123,887				128,113
Shares used in diluted per share calculation			126,630				127,137				125,910				126,792				129,087

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

		Three Months Ended												Six Months Ended
(In thousands, except per share amounts)		June 30				March 31				July 1				June 30				July 1
(Unaudited)		2007				2007				2006				2007				2006
Net income excluding certain charges and benefits:		$	57,345			$	53,783			$	52,705			$	111,128			$	86,240
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		$	57,345			$	53,783			$	52,705			$	111,128			$	77,422
Net income per diluted share excluding certain charges and benefits:		$	0.45			$	0.42			$	0.42			$	0.88			$	0.67
Restructuring and other charges			—				—				—				—				(0.10	)
Legal settlement			—				—				—				—				(0.02	)
Cumulative effect of a change in accounting principle			—				—				—				—				0.01
Tax effect of the above charges and benefits			—				—				—				—				0.04
Net income per diluted share		$	0.45			$	0.42			$	0.42			$	0.88			$	0.60

NOVELLUS SYSTEMS, INC.
SCHEDULE OF SHARE-BASED COMPENSATION

		Three Months Ended												Six Months Ended
		June 30				March 31				July 1				June 30				July 1
(In thousands)		2007				2007				2006				2007				2006
(Unaudited)		(1)				(2)				(3)				(1)				(3)
Cost of sales		$	565			$	510			$	538			$	1,075			$	846
Selling, general and administrative			5,248				5,697				5,590				10,945				11,029
Research and development			3,107				2,895				2,664				6,002				5,725
Total share-based compensation expenses			8,920				9,102				8,792				18,022				17,600
Benefit from income taxes			2,080				2,276				3,385				4,356				6,776
Net share-based compensation expenses		$	6,840			$	6,826			$	5,407			$	13,666			$	10,824

NOVELLUS SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,				December 31,
		2007				2006
(In thousands)		(Unaudited)				*
ASSETS
Current assets:
Cash and short-term investments		$	866,291			$	853,328
Accounts receivable, net			421,898				310,888
Inventories			233,345				198,571
Deferred taxes and other current assets			144,584				142,506
Total current assets			1,666,118				1,505,293
Property and equipment, net			341,901				364,599
Restricted cash			148,201				143,769
Goodwill			229,650				225,431
Intangible and other assets			128,823				123,400
Total assets		$	2,514,693			$	2,362,492
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	281,202			$	261,659
Deferred profit			55,547				41,351
Income taxes payable			33,665				38,879
Current obligations under lines of credit			16,986				19,480
Total current liabilities			387,400				361,369
Long-term debt			130,967				127,862
Other liabilities			56,665				38,556
Total liabilities			575,032				527,787
Shareholders’ equity:
Common stock			1,426,998				1,393,914
Retained earnings and accumulated other comprehensive income			512,663				440,791
Total shareholders’ equity			1,939,661				1,834,705
Total liabilities and shareholders’ equity		$	2,514,693			$	2,362,492