Inventories, net

12 Months Ended

Dec. 31, 2022

Inventories, net

Inventories, net

Note 6. Inventories, net

The components of inventories are as follows:

	December 31,		December 31,
	2022		2021
	(in thousands)
Raw materials	$	187,313	$	133,784
Work in process		35,069		43,164
Finished goods (completed systems)		20,024		18,036
Inventories, net	$	242,406	$	194,984

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for our products or market conditions. We regularly evaluate our ability to realize the value of inventories based on a combination of factors including the following: forecasted sales and the size and utilization of our installed base, estimated product end of life dates, estimated current and future market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory exposure. In 2022, we recorded an increase of $0.2 million in inventory reserves. At December 31, 2022 and 2021, inventories are stated net of inventory reserves of $6.7 million and $6.5 million, respectively.

During the years ended December 31, 2022, 2021 and 2020, we recorded charges to cost of sales of $4.6 million, $3.8 million and $3.7 million, respectively, to adjust inventories to their lower of cost or net realizable value.

We have inventory on consignment at customer locations at December 31, 2022 and 2021, of $6.4 million and $5.5 million, respectively.