Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.21.2
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 3 Months Ended
Sep. 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; Printed Circuit Board (“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 Semiconductor Process Control (“SPC”) segment offers a comprehensive portfolio of inspection, metrology and data analytics products, and related service, which helps integrated circuit ("IC") manufacturers achieve target yield throughout the entire semiconductor fabrication process – from research and development 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 microelectromechanical systems, 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, flat panel displays 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, which accounted for the majority of our Other reportable segment. The sale was completed in the first quarter of fiscal 2021.
The CODM assesses the performance of each operating segment and allocates resources to those segments based on total revenues 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:
  Three Months Ended September 30,
(In thousands) 2021 2020
SPC:
Revenues $ 1,779,083  $ 1,267,954 
Segment gross margin 1,161,929  814,810 
Specialty Semiconductor Process:
Revenues 102,029  88,954 
Segment gross margin 54,721  49,928 
PCB, Display and Component Inspection:
Revenues 202,808  181,177 
Segment gross margin 94,476  90,169 
Other:
Revenues —  140 
Segment gross margin —  13 
Totals:
Revenues for reportable segments $ 2,083,920  $ 1,538,225 
Segment gross margin $ 1,311,126  $ 954,920 

The following table reconciles total revenues for reportable segments to total revenues for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2021 2020
Total revenues for reportable segments $ 2,083,920  $ 1,538,225 
Corporate allocations and effects of foreign exchange rates (82) 395 
Total revenues $ 2,083,838  $ 1,538,620 

The following table reconciles total segment gross margin to total income before income taxes for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2021 2020
Total segment gross margin $ 1,311,126  $ 954,920 
Acquisition-related charges, corporate allocations, and effects of foreign exchange rates(1)
40,912  36,862 
Research and development 258,153  219,038 
Selling, general and administrative 193,261  172,631 
Interest expense 38,312  39,386 
Other expense (income), net 14,140  3,197 
Income before income taxes $ 766,348  $ 483,806 
__________________
(1)Acquisition-related charges primarily include amortization of intangible assets and amortization of inventory fair value adjustments 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.
The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods:
(Dollar amounts in thousands) Three Months Ended September 30,
2021 2020
Revenues:
China $ 685,156  33  % $ 486,089  32  %
Taiwan 627,084  30  % 369,100  24  %
Korea 239,183  12  % 189,518  12  %
North America 177,740  9  % 170,176  11  %
Japan 175,167  8  % 164,419  11  %
Rest of Asia 92,068  4  % 76,201  5  %
Europe and Israel 87,440  4  % 83,117  5  %
Total $ 2,083,838  100  % $ 1,538,620  100  %
The following is a summary of revenues by major product categories for the indicated periods:
(Dollar amounts in thousands) Three Months Ended September 30,
2021 2020
Revenues:
Wafer Inspection $ 887,512  43  % $ 519,551  34  %
Patterning 439,591  21  % 370,932  24  %
Specialty Semiconductor Process 93,120  4  % 74,027  5  %
PCB, Display and Component Inspection 137,887  7  % 120,626  8  %
Services 453,950  22  % 393,125  26  %
Other 71,778  3  % 60,359  3  %
Total $ 2,083,838  100  % $ 1,538,620  100  %
Wafer Inspection and Patterning products are offered in the SPC segment. Services are offered in multiple segments. Other includes primarily refurbished systems, remanufactured legacy systems, and enhancements and upgrades for previous-generation products which are part of the SPC segment.
In the three months ended September 30, 2021, one customer accounted for approximately 24% of total revenues. In the three months ended September 30, 2020, two customers accounted for approximately 14% and 12% of total revenues. One customer on an individual basis accounted for greater than 10% of net accounts receivable at September 30, 2021 and at June 30, 2021, respectively.
Land, property and equipment, net by geographic region as of the dates indicated below were as follows: 
As of As of
(In thousands) September 30, 2021 June 30, 2021
Land, property and equipment, net:
United States $ 476,809  $ 447,359 
Singapore 81,160  76,882 
Israel 60,064  57,403 
Europe 56,153  56,895 
Rest of Asia 24,361  24,488 
Total $ 698,547  $ 663,027