Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.21.4
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 6 Months Ended
Dec. 31, 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 (“SPC”); 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 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 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 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 profit and does not evaluate the segments using discrete asset information. Segment gross profit 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 December 31, Six Months Ended December 31,
(In thousands) 2021 2020 2021 2020
SPC:
Revenues $ 2,052,202  $ 1,380,184  $ 3,831,285  $ 2,648,138 
Segment gross profit 1,342,937  884,090  2,504,866  1,698,900 
Specialty Semiconductor Process:
Revenues 112,738  90,587  214,767  179,540 
Segment gross profit 60,274  51,171  114,995  101,099 
PCB, Display and Component Inspection:
Revenues 187,977  179,267  390,785  360,444 
Segment gross profit 82,322  84,584  176,798  174,753 
Other:
Revenues —  449  —  590 
Segment gross profit —  (121) —  (108)
Totals:
Revenues for reportable segments $ 2,352,917  $ 1,650,487  $ 4,436,837  $ 3,188,712 
Segment gross profit $ 1,485,533  $ 1,019,724  $ 2,796,659  $ 1,974,644 

The following table reconciles total revenues for reportable segments to total revenues for the indicated periods:
  Three Months Ended December 31, Six Months Ended December 31,
(In thousands) 2021 2020 2021 2020
Total revenues for reportable segments $ 2,352,917  $ 1,650,487  $ 4,436,837  $ 3,188,712 
Corporate allocations and effects of changes in foreign currency exchange rates (287) 383  (369) 778 
Total revenues $ 2,352,630  $ 1,650,870  $ 4,436,468  $ 3,189,490 

The following table reconciles total segment gross profit to total income before income taxes for the indicated periods:
  Three Months Ended December 31, Six Months Ended December 31,
(In thousands) 2021 2020 2021 2020
Total segment gross profit $ 1,485,533  $ 1,019,724  $ 2,796,659  $ 1,974,644 
Acquisition-related charges, corporate allocations, and effects of changes in foreign currency exchange rates(1)
41,065  38,587  81,977  75,449 
R&D 265,031  229,064  523,184  448,102 
SG&A 213,479  181,909  406,740  354,540 
Interest expense 37,852  38,880  76,164  78,266 
Other expense (income), net 1,201  3,882  15,341  7,079 
Income before income taxes $ 926,905  $ 527,402  $ 1,693,253  $ 1,011,208 
__________________
(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 December 31, Six Months Ended December 31,
2021 2020 2021 2020
Revenues:
Taiwan $ 776,442  33  % $ 380,785  23  % $ 1,403,526  31  % $ 749,886  24  %
China 544,537  23  % 382,157  23  % 1,229,693  28  % 868,246  27  %
Korea 323,095  14  % 347,947  21  % 562,278  13  % 537,465  17  %
North America 271,594  12  % 214,808  13  % 449,334  10  % 384,984  12  %
Japan 196,282  8  % 156,721  10  % 371,449  8  % 321,140  10  %
Europe and Israel 175,195  7  % 100,201  6  % 262,635  6  % 183,318  6  %
Rest of Asia 65,485  3  % 68,251  4  % 157,553  4  % 144,451  4  %
Total $ 2,352,630  100  % $ 1,650,870  100  % $ 4,436,468  100  % $ 3,189,490  100  %
The following is a summary of revenues by major product categories for the indicated periods:
(Dollar amounts in thousands) Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Revenues:
Wafer Inspection $ 1,104,032  48  % $ 687,030  42  % $ 1,991,544  45  % $ 1,206,581  38  %
Patterning 508,785  22  % 307,512  19  % 948,376  21  % 678,444  21  %
Specialty Semiconductor Process 104,932  4  % 71,978  4  % 198,052  4  % 146,005  5  %
PCB, Display and Component Inspection 121,750  5  % 115,825  7  % 259,637  6  % 236,451  7  %
Services 456,861  19  % 412,847  25  % 910,811  21  % 805,972  25  %
Other 56,270  2  % 55,678  3  % 128,048  3  % 116,037  4  %
Total $ 2,352,630  100  % $ 1,650,870  100  % $ 4,436,468  100  % $ 3,189,490  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 that are part of the SPC segment.
In the three months ended December 31, 2021, two customers accounted for approximately 26% and 10% of total revenues. In the three months ended December 31, 2020 two customers each accounted for approximately 14% of total revenues. In the six months ended December 31, 2021, one customer accounted for approximately 25% of total revenues. In the six months ended December 31, 2020, two customers accounted for approximately 14% and 13% of total revenues. One customer on an individual basis accounted for greater than 10% of net accounts receivable at December 31, 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) December 31, 2021 June 30, 2021
Land, property and equipment, net:
United States $ 490,597  $ 447,359 
Singapore 79,880  76,882 
Israel 65,269  57,403 
Europe 55,262  56,895 
Rest of Asia 26,170  24,488 
Total $ 717,178  $ 663,027