Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.21.2
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 12 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer.
We have four reportable segments: Semiconductor Process Control; Specialty Semiconductor Process; PCB, Display and Component Inspection; and Other. The reportable segments are determined based on several factors including, but not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics.
Semiconductor Process Control.
The SPC segment offers comprehensive portfolio of inspection, metrology and data analytics products, and related service, which helps integrated circuit manufacturers achieve target yield throughout the entire semiconductor fabrication process, from R&D to final volume production. Our differentiated products and services are designed to provide comprehensive solutions that help our customers accelerate development and production ramp cycles, achieve higher and more stable semiconductor die yields and improve their overall profitability. This reportable segment is comprised of two operating segments, Wafer Inspection and Patterning and GSS.
Specialty Semiconductor Process
The Specialty Semiconductor Manufacturing segment develops and sells advanced vacuum deposition and etching process tools, which are used by a broad range of specialty semiconductor customers, including manufacturers of MEMS, radio frequency communication chips, and power semiconductors for automotive and industrial applications. This reportable segment is comprised of one operating segment.
PCB, Display and Component Inspection
The PCB, Display and Component Inspection segment enables electronic device manufacturers to inspect, test and measure PCBs, FPDs and ICs to verify their quality, pattern the desired electronic circuitry on the relevant substrate and
perform three-dimensional shaping of metalized circuits on multiple surfaces. This segment also engages in the development and marketing of character recognition solutions to banks, financial and other payment processing institutions and healthcare providers. This reportable segment is comprised of two operating segments, PCB and Display and Component Inspection.
Other
The Other segment is comprised of one operating segment. During the fourth quarter of fiscal 2020, we entered into an Asset Purchase Agreement to sell certain core assets of our non-strategic solar energy business, OLTS, which accounted for the majority of our Other reportable segment. The sale was completed in the first quarter of fiscal 2021 with an insignificant amount of proceeds. This business was engaged in the research, development and marketing of products for the deposition of thin film coating of various materials on crystalline silicon photovoltaic wafers for solar energy panels.
The CODM assesses the performance of each operating segment and allocates resources to those segments based on total revenue and segment gross margin and does not evaluate the segments using discrete asset information. Segment gross margin excludes corporate allocations and effects of foreign currency exchange rates, amortization of intangible assets, amortization of inventory fair value adjustments, and transaction costs associated with our acquisitions related to costs of revenues.
The following is a summary of results for each of our four reportable segments for the indicated periods:
  Year Ended June 30,
(In thousands) 2021 2020 2019
Semiconductor Process Control:
Revenues $ 5,734,825  $ 4,745,446  $ 4,080,822 
Segment gross margin $ 3,705,222  $ 3,028,167  $ 2,590,434 
Specialty Semiconductor Process:
Revenues $ 369,216  $ 329,700  $ 151,164 
Segment gross margin $ 206,706  $ 183,641  $ 78,800 
PCB, Display and Component Inspection:
Revenues $ 812,620  $ 727,451  $ 332,810 
Segment gross margin $ 390,571  $ 315,723  $ 155,765 
Other:
Revenues $ 739  $ 3,614  $ 4,676 
Segment gross margin $ (68) $ (63) $ 1,102 
Totals:
Revenues for reportable segments $ 6,917,400  $ 5,806,211  $ 4,569,472 
Segment gross margin $ 4,302,431  $ 3,527,468  $ 2,826,101 
The following table reconciles total reportable segment revenue to total revenue for the indicated periods:
  Year Ended June 30,
(In thousands) 2021 2020 2019
Total revenues for reportable segments $ 6,917,400  $ 5,806,211  $ 4,569,472 
Corporate allocations and effects of foreign exchange rates 1,334  213  (568)
Total revenues $ 6,918,734  $ 5,806,424  $ 4,568,904 
The following table reconciles total segment gross margin to total income before income taxes for the indicated periods:
  Year Ended June 30,
(In thousands) 2021 2020 2019
Total segment gross margin $ 4,302,431  $ 3,527,468  $ 2,826,101 
Acquisition-related charges, corporate allocations and effects of foreign exchange rates(1)
155,862  170,605  126,574 
Research and development 928,487  863,864  711,030 
Selling, general and administrative 729,602  734,149  599,124 
Goodwill impairment —  256,649  — 
Interest expense 157,328  160,274  124,604 
Loss on extinguishment of debt —  22,538  — 
Other expense (income), net (29,302) 2,678  (31,462)
Income before income taxes $ 2,360,454  $ 1,316,711  $ 1,296,231 
__________________
(1)Acquisition-related charges primarily include amortization of intangible assets, amortization of inventory fair value adjustments, and other acquisition-related costs classified or presented as part of costs of revenues.
Our significant operations outside the United States include manufacturing facilities in China, Germany, Israel and Singapore and sales, marketing and service offices in Japan, the rest of the Asia Pacific region and Europe. For geographical revenue reporting, revenues are attributed to the geographic location in which the customer is located. Long-lived assets consist of land, property and equipment, net, and are attributed to the geographic region in which they are located.
We have revised the fiscal 2020 revenue by geographic regions as presented below. The revisions were to correct the amount of revenue allocated to each geographic region. These revisions had no impact on the previously issued Consolidated Balance Sheet, Statements of Operations, Statements of Cash Flows, Statements of Comprehensive Income (Loss) or Statements of Stockholders’ Equity as of and for the year-ended June 30, 2020 and we determined that the impact of the revisions was not material to our previously issued Consolidated Financial Statements.
The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods:
(Dollar amounts in thousands) Year Ended June 30,
2021 2020 2019
Revenues:
China $ 1,831,446  26  % $ 1,495,977  26  % $ 1,215,807  27  %
Taiwan 1,690,558  25  % 1,598,201  27  % 1,105,726  24  %
Korea 1,343,473  19  % 911,848  16  % 584,091  13  %
North America 765,974  11  % 651,328  11  % 596,452  13  %
Japan 639,381  9  % 660,772  11  % 581,529  13  %
Europe and Israel 396,422  6  % 322,085  6  % 305,924  7  %
Rest of Asia 251,480  4  % 166,213  3  % 179,375  3  %
Total $ 6,918,734  100  % $ 5,806,424  100  % $ 4,568,904  100  %
The following is a summary of revenues by major products for the indicated periods:
(Dollar amounts in thousands) Year ended June 30,
2021 2020 2019
Revenues:
Wafer Inspection $ 2,661,167  39  % $ 2,080,484  36  % $ 1,630,899  36  %
Patterning 1,505,990  22  % 1,278,382  22  % 1,161,263  25  %
Specialty Semiconductor Process 304,627  4  % 269,667  5  % 129,854  3  %
PCB, Display and Component Inspection 562,104  8  % 497,026  9  % 238,275  5  %
Services 1,678,418  24  % 1,477,699  25  % 1,176,661  26  %
Other 206,428  3  % 203,166  3  % 231,952  5  %
Total $ 6,918,734  100  % $ 5,806,424  100  % $ 4,568,904  100  %
Wafer Inspection and Patterning products are offered in Semiconductor Process Control segment. Services are offered in multiple segments. Other includes primarily refurbished systems, remanufactured legacy systems, and enhancements and upgrades for previous-generation products that are part of Semiconductor Process Control segment.
In the fiscal year ended June 30, 2021, two customers accounted for approximately 17% and 15% of total revenues. In the fiscal year ended June 30, 2020, two customers accounted for approximately 20% and 14% of total revenues. In the fiscal year ended June 30, 2019, one customer accounted for approximately 15% of total revenues.
Land, property and equipment, net by geographic region as of the dates indicated below were as follows:
  As of June 30,
(In thousands) 2021 2020
Land, property and equipment, net:
United States $ 447,359  $ 329,558 
Singapore 76,882  54,946 
Israel 57,403  59,162 
Europe 56,895  58,065 
Rest of Asia 24,488  18,093 
Total $ 663,027  $ 519,824