Jul. 27--Semiconductor equipment supplier Novellus Inc. is in the process of consolidating all its manufacturing in Tualatin, but the Silicon Valley company left open the possibility that Oregon may only be a way station and that those jobs may all be headed overseas eventually.

Novellus already employs 400 at a Tualatin facility it opened in 2002, where it does research, production and some administrative work. By the end of the year, the company said, it will shift an unspecified number of jobs to Oregon from a production facility in San Jose.

Novellus, which suffered a 54 percent decline in sales in the second quarter and reported a $50 million loss, said it expects to save between $5 million and $6 million annually from the shift.

In an interview with Bloomberg this month, Novellus chief executive Richard Hill said economic uncertainty and the prospect of higher taxes on California employees helped prompt the move. But he added that Novellus is considering moving all production overseas, closer to its customers.

"Our loyalties have to be to our customers, our employees and our shareholders," Hill told the news service. "The real big question becomes, do we just move to Oregon or is the next move internationally."

-- Mike Rogoway; Silicon Forest Blog; twitter: @rogoway

-----

To see more of The Oregonian, or to subscribe the newspaper, go to http://www.oregonian.com.

Copyright (c) 2009, The Oregonian, Portland, Ore.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:NVLS,

A service of YellowBrix, Inc.