Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.22.2
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 12 Months Ended
Jun. 30, 2022
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 Semiconductor Process Control segment offers a comprehensive portfolio of inspection, metrology and data analytics products, and related services, which helps 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 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 profit and does not evaluate the segments using discrete asset information. Segment gross profit excludes corporate allocations and effects of changes in 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) 2022 2021 2020
Semiconductor Process Control:
Revenues $ 7,924,822  $ 5,734,825  $ 4,745,446 
Segment gross profit $ 5,167,679  $ 3,705,222  $ 3,028,167 
Specialty Semiconductor Process:
Revenues $ 456,579  $ 369,216  $ 329,700 
Segment gross profit $ 242,520  $ 206,706  $ 183,641 
PCB, Display and Component Inspection:
Revenues $ 832,176  $ 812,620  $ 727,451 
Segment gross profit $ 378,964  $ 390,571  $ 315,723 
Other:
Revenues $ —  $ 739  $ 3,614 
Segment gross profit $ —  $ (68) $ (63)
Totals:
Revenues for reportable segments $ 9,213,577  $ 6,917,400  $ 5,806,211 
Segment gross profit $ 5,789,163  $ 4,302,431  $ 3,527,468 
The following table reconciles total reportable segment revenue to total revenue for the indicated periods:
  Year Ended June 30,
(In thousands) 2022 2021 2020
Total revenues for reportable segments $ 9,213,577  $ 6,917,400  $ 5,806,211 
Corporate allocations and effects of foreign exchange rates (1,694) 1,334  213 
Total revenues $ 9,211,883  $ 6,918,734  $ 5,806,424 
The following table reconciles total segment gross profit to total income before income taxes for the indicated periods:
  Year Ended June 30,
(In thousands) 2022 2021 2020
Total segment gross profit $ 5,789,163  $ 4,302,431  $ 3,527,468 
Acquisition-related charges, corporate allocations and effects of foreign exchange rates(1)
169,721  155,862  170,605 
R&D 1,105,254  928,487  863,864 
SG&A 860,007  729,602  734,149 
Goodwill impairment —  —  256,649 
Interest expense 160,339  157,328  160,274 
Loss on extinguishment of debt —  —  22,538 
Other expense (income), net 4,605  (29,302) 2,678 
Income before income taxes $ 3,489,237  $ 2,360,454  $ 1,316,711 
__________________
(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 U.S. 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) Year Ended June 30,
2022 2021 2020
Revenues:
China $ 2,660,438  29  % $ 1,831,446  26  % $ 1,495,977  26  %
Taiwan 2,528,482  27  % 1,690,558  25  % 1,598,201  27  %
Korea 1,430,495  16  % 1,343,473  19  % 911,848  16  %
North America 928,043  10  % 765,974  11  % 651,328  11  %
Japan 724,773  8  % 639,381  9  % 660,772  11  %
Europe and Israel 636,664  7  % 396,422  6  % 322,085  6  %
Rest of Asia 302,988  3  % 251,480  4  % 166,213  3  %
Total $ 9,211,883  100  % $ 6,918,734  100  % $ 5,806,424  100  %
The following is a summary of revenues by major products for the indicated periods:
(Dollar amounts in thousands) Year ended June 30,
2022 2021 2020
Revenues:
Wafer Inspection $ 4,014,726  44  % $ 2,661,167  39  % $ 2,080,484  36  %
Patterning 2,050,025  22  % 1,505,990  22  % 1,278,382  22  %
Specialty Semiconductor Process 414,811  4  % 304,627  4  % 269,667  5  %
PCB, Display and Component Inspection 562,464  6  % 562,104  8  % 497,026  9  %
Services 1,910,455  21  % 1,678,418  24  % 1,477,699  25  %
Other 259,402  3  % 206,428  3  % 203,166  3  %
Total $ 9,211,883  100  % $ 6,918,734  100  % $ 5,806,424  100  %
Wafer Inspection and Patterning products are offered in the 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 the Semiconductor Process Control segment.
In the fiscal year ended June 30, 2022, two customers accounted for approximately 20% and 12% of total revenues. 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.
Land, property and equipment, net by geographic region as of the dates indicated below were as follows:
  As of June 30,
(In thousands) 2022 2021
Land, property and equipment, net:
U.S. $ 547,454  $ 447,359 
Singapore 146,057  76,882 
Israel 72,791  57,403 
Europe 55,370  56,895 
Rest of Asia 28,257  24,488 
Total $ 849,929  $ 663,027