Lam Research and Novellus Systems

All Hands Meeting

December 15-16, 2011

Lam Research Confidential

Filed by Lam Research Corporation

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934

Subject Company: Novellus Systems, Inc.

Commission File No.:  000-17157

Exhibit 99.7

Lam Research Confidential

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2

(v7)

A Transformative Transaction

Lam Research and Novellus Systems have signed an agreement to combine the

two companies

–

The new company will be called Lam Research. The NASDAQ symbol is:  LRCX

The $3.3 billion, all-stock deal is expected to close in Q2 of CY2012

This is a game-changing move for both companies; together we can bring value to

our customers, employees, shareholders that we couldn’t have done independently

This

is

great

news,

and

we

are

excited

about

what

this

will

mean

for

our

companies

and our shareholders

Lam Research Confidential

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(v7)

Compelling Strategic Rationale

Complementary products and technology

Accelerating the pace of innovation

Superior ability to meet customer requirements

Enhanced revenue growth

Significant operational synergies

Lam Research Confidential

Slide

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4

(v7)

Lam + Novellus = A Powerful Combination

Novellus is a $1.5 billion leader in deposition and surface preparation technologies

Novellus’

strengths complement Lam’s expertise in etch and single-wafer clean

Together we will grow revenue faster by:

–

Advancing technical benefits from owning adjacent technologies

–

Optimizing collective development of next-generation tools

–

Further develop complementary customer relationships

Increased

scale

enables

more

comprehensive

support

tailored

to

customers’

needs

Combined management strength can grow the company to new heights

Combined company = $4.6 billion in revenue

Lam Research Confidential

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5

(v7)

Spares &

Services

Etch

Surface

Preparation

Deposition

Industrial 

Applications

Complementary Product Leadership

Note:  CVD: chemical vapor deposition; Cu ECD:  copper electrochemical deposition; WCVD: tungsten chemical vapor deposition.

Source:  Leadership positions based on Gartner Dataquest and company data specific to 2010 shares; WFE percentages based on Gartner Dataquest and company data.

Leadership

Position in

Emerging

Markets

#1 in Etch

#1 in Cu ECD

#1 in WCVD

#2 in PECVD

Customer -

Recognized

for Supplier

Leadership

#2 in Dry Strip

#2 in Clean

12% -

14%

of WFE

5% -

6%

of WFE

12% -

14%

of WFE

Expect to serve ~32% of total wafer fab equipment market

Lam Research Confidential

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(v7)

Enhanced Financial Profile

Enhanced

Revenue Growth

Technical benefits from owning adjacent technologies

Collectively optimize and accelerate development of next-generation tools

Further develop deep and complementary customer relationships

Cost Synergies

Annualized cost savings of ~$100 million by CQ4 2013

–

Significant supplier and operating expense synergies

Balance Sheet

Strong balance sheet to pursue strategic plans and enable significant a

$1.6 billion share repurchase

–

~$3.1

billion

gross

cash;

~$1.7

billion

debt

1

EPS Accretion

Accretive within 12 months following transaction close

1

Pro forma as of quarter ended September 2011.  Debt stated at maturity value.

Multiple value creation levers

Lam Research Confidential

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(v7)

The Right Time –

the Right Combination

IC device complexity is growing

–

Semiconductor device roadmap facing steep technology and cost challenges

–

Increases the importance for customers to partner with strong suppliers

Opportunities for equipment suppliers are growing

–

Long-term demand being driven by mobility and cloud computing trends

–

Chipmakers require strategic vendors who can address technical hurdles

Right combination for future growth opportunities

–

Combined company able to deliver solutions neither could offer independently

–

Increased scale enables even more comprehensive support capabilities tailored to

customers’

needs

–

Technical adjacencies support rapid development of leading-edge process solutions

–

Efficiently & effectively develop solutions for next-generation technology including 450 mm

–

Management depth and breadth capable of accomplishing combined goals

Lam Research Confidential

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(v7)

The Right Fit –

Our Cultures

Both companies have roots in Silicon Valley

–

Headquartered in Fremont and San Jose with operations in many of

the same locations

Our customer structures are essentially the same

–

Our respective customer strengths will be beneficial across all product lines

Our employees share similar values and a spirit of innovation

The senior leadership will be drawn from both companies

–

Martin Anstice will be the President and CEO

–

Tim Archer will be the COO

–

Ernie Maddock will be the CFO

Lam Research Confidential

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(v7)

Initial Observations About Combining the Companies

Cultures are very compatible

Approach to managing the business is very similar

Fundamental organizational structures are essentially the same

Challenge facing us is to create a highly effective new organization while

realizing committed synergies

We will be methodical, thoughtful, and fair about decisions relating to

organizational change

Lam Research Confidential

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(v7)

Next Steps

Strong cultural fit

Geographic proximity

Integrating management team

Integrating Board of Directors

Integration team from both companies

Focus on value creation from revenue

growth and organizational efficiencies

Areas of revenue and cost synergy

opportunities identified

Planning for Success

One Team

Preparing for an efficient and successful integration

Lam Research Confidential

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(v7)

What Does This Mean for Me Now?

“Business as usual”

until the transaction closes

–

Stay focused on your day-to-day goals

Ongoing organizational structure and business processes will continue

–

2012 PM&D and comp focal processes will continue as planned

–

2012 AOP process has been rescheduled; further information to come this week

–

There is no change to existing OLT roles and responsibilities until further notice

Do not communicate with Novellus employees unless authorized by your

OLT or Regional executive

We will share further information about integration as it becomes available

Lam Research Confidential

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(v7)

Where Can I Find More Information?

A link to resources for employees can be found on Lam’s intranet site under

the icon:  Lam & Novellus Merger

–

Employee memo

–

Employee FAQs

–

Video of Directors And Above meeting (by end of day Thursday)

This is a big event for us and open and clear communications is very important.

For

this

reason,

a

SharePoint

site

has

been

specifically

created

to

address

employee

questions and/or comments

–

Post on the SharePoint site, not on the Employee Forum

Lam Research Confidential

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(v7)

In Closing

2011 has been a great year for Lam Research

Your passion for the products Lam manufactures, markets, and sells and your

commitment

to

our

customers’

success

are

key

reasons

why

the

Company

accomplishes so much year after year

The

character

and

achievements

of

our

people

make

Lam

Research

a

great

company

and I have tremendous confidence that Lam will continue to succeed as a great

company far into the future

Relax and enjoy the holiday season with your family and friends

Lam Research Confidential

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(v7)

How to Find Further Information

This communication does not constitute an offer to sell or the solicitation of an offer to buy any

securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any

jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification

under the securities laws of any such jurisdiction. In connection with the proposed merger, Lam intends

to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Lam

and Novellus that also constitutes a prospectus of Lam. Lam and Novellus will furnish the joint proxy

statement/prospectus and other relevant documents to their respective security holders in connection

with the proposed merger of Lam and Novellus. BEFORE MAKING ANY VOTING OR INVESTMENT

DECISION, WE URGE SECURITY HOLDERS AND INVESTORS TO READ THE JOINT PROXY

STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND

OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOM

AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LAM AND NOVELLUS

AND THE PROPOSED MERGER. The proposals for the merger will be made solely through the joint proxy

statement/prospectus. In addition, a copy of the joint proxy statement/prospectus (when it becomes

available) may be obtained free of charge from Lam Research Corporation, Investor Relations, 4650

Cushing Parkway, Fremont, CA 94538-6401, or from Novellus, Investor Relations, 4000 North First Street,

San Jose, CA 95134. Security holders will be able to obtain, free of charge, copies of the joint proxy

statement/prospectus and S-4 Registration Statement and any other documents filed by Lam or Novellus

with the SEC in connection with the proposed Merger at the SEC’s website at http://www.sec.gov, and at

the companies’ websites at www.lamresearch.com and www.novellus.com, respectively.

Lam Research Confidential

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(v7)

Cautions Regarding Forward-Looking Statements

This announcement contains, or may contain, “forward-looking statements”

concerning Lam and Novellus (together such companies and their

subsidiaries being the “Merged Company”), which are subject to the safe harbor provisions created by the Private Securities Litigation Reform

Act of 1995. Generally, the words “believe,”

“anticipate,”

“expect,”

“may,”

“should,”

“could,”

and other future-oriented terms identify forward-

looking statements. Forward-looking statements include, but are not limited to, statements relating to the following: (i) the expected benefits of

the Merger and the repurchase program, the expected accretive effect of the Merger and the repurchase program on the Merged Company’s

financial results, expected cost, revenue, technology and other synergies, the expected impact for customers, employees and end-users, future

capital

expenditures,

expenses,

revenues,

earnings,

economic

performance,

financial

condition,

losses

and

future

prospects;

(ii)

business

and

management

strategies

and

the

expansion

and

growth

of

Lam’s

or

Novellus’

operations;

(iii)

the

effects

of

government

regulation

on

Lam’s,

Novellus’

or the Merged Company’s business; (iv) future industry developments and trends; (v) the anticipated timing of shareholder meetings

and completion of the proposed merger and the repurchase program; and (vii) assumptions underlying any of the foregoing statements.

These forward-looking statements are based upon the current beliefs and expectations of the management of Lam and Novellus and involve risks

and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks

and uncertainties relate to factors that are beyond Lam’s and Novellus’

ability to control or estimate precisely and include, without limitation: the

ability to obtain governmental or stockholder approvals of the Merger or to satisfy other conditions to the Merger on the proposed terms and

timeframe; the possibility that the Merger does not close when expected or at all, or that the companies may be required to modify aspects of the

Merger to achieve regulatory approval; the ability to realize the expected synergies or other benefits from the transaction in the amounts or in the

timeframe anticipated; the potential harm to customer, supplier,

employee and other relationships caused by the announcement or closing of the

Merger; the ability to integrate Novellus’

and Lam’s businesses in a timely and cost-efficient manner; uncertainties in the global economy and

credit markets; unanticipated trends with respect to the cyclicality of the semiconductor industry; and rates of change in, future shipments,

margins, market share, capital expenditures, revenue and operating expenses generally; volatility in quarterly results and in the stock price of the

Merged Company; customer requirements and the ability to satisfy

those requirements; customer capital spending and their demand for the

Merged Company’s products; the ability to defend the Merged Company’s market share and to gain new market share; anticipated growth in the

industry and the total market for wafer-fabrication and support equipment and the Merged Company’s growth relative to such growth; levels of

research and development (“R&D”) expenditures; the estimates made, and the accruals recorded, in order to implement critical accounting

policies (including but not limited to the adequacy of prior tax

payments, future tax liabilities and the adequacy of the Merged

Company’s

accruals relating to them); access to capital markets; the ability to manage and grow the Merged Company’s cash position;

(continued on next page)

Lam Research Confidential

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(v7)

Cautions Regarding Forward-Looking Statements

(continued from prior page)  the sufficiency of the Merged Company’s financial resources to support future business activities (including but not

limited to the repurchase program, operations, investments, debt

service requirements and capital expenditures); inventory levels and inventory

valuation adjustments; the impact of legal proceedings; unexpected shipment delays which adversely impact shipment volumes; inaccuracies

related to the timing and satisfaction of remaining obligations related to vacated leases; the inability to recover the amortized cost of investments

in auction-rate securities, market changes negatively affecting auction-rate securities and the government’s inability to guarantee the underlying

securities; the inability to enforce the Merged Company’s patents and protect its trade secrets; and other risks and uncertainties, including those

detailed from time to time in Lam’s and Novellus’

periodic reports (whether under the caption Risk Factors or Forward Looking Statements or

elsewhere).  Neither Lam nor Novellus can give any assurance that such forward-looking statements will prove to have been correct. The reader

is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. Neither

Lam nor Novellus nor any other person undertakes any obligation to update or revise publicly any of the forward-looking statements set out

herein,

whether

as

a

result

of

new

information,

future

events

or

otherwise,

except

to

the

extent

legally

required.

Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of Lam, Novellus, or the

Merged Company, following the implementation of the Merger or otherwise. No statement in this announcement should be interpreted

to mean

that the earnings per share, profits, margins or cash flows of Lam or the Merged Company for the current or future financial years would

necessarily match or exceed the historical published figures.

Lam Research Confidential

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(v7)

Participants in the Solicitation

The directors and executive officers of Novellus and Lam may be deemed to be participants in the

solicitation of proxies in connection with the approval of the proposed transaction. Lam plans to file 

the registration statement that includes the joint proxy statement/prospectus with the SEC in

connection with the solicitation of proxies to approve the proposed transaction.  Information regarding

Lam’s directors and executive officers and their respective interests in Lam by security holdings or

otherwise is available in its Annual Report on Form 10-K filed with the SEC on August 19, 2011 and its

Proxy Statement on Schedule 14A filed with the SEC on September 19, 2011.  Information regarding

Novellus’ directors and executive officers and their respective interests in Novellus by security

holdings or otherwise is available in its Annual Report on Form 10-K filed with the SEC on February 25,

2011 and its Proxy Statement on Schedule 14A filed with the SEC on April 8, 2011.  Additional

information regarding the interests of such potential participants is or will be included in the joint proxy

statement/prospectus and registration statement, and other relevant materials to be filed with the SEC,

when they become available, including in connection with the solicitation of proxies to approve the

proposed transaction and to elect directors.