INVENTORIES

6 Months Ended

Jun. 30, 2023

At June 30, 2023 and December 31, 2022, inventories consisted of the following:


	June 30, 2023		December 31, 2022
Raw materials	$	192,336	$	167,135
Work-in-process	109,830		79,126
Finished goods	168,928		146,911
Total inventory	$	471,094	$	393,172

Inventories are stated at the lower of cost or net realizable value on a moving weighted average basis. At June 30, 2023 and December 31, 2022, the value of finished goods inventory of which were first-tools at customer physical locations for which customers were contractually obligated to take ownership upon acceptance totaled $119,683 and $123,169, respectively.

The $55.9 million increase in raw materials and work-in-process inventory at June 30, 2023 compared to December 31, 2022 was due to additional purchase of supplies to support a higher level of expected total shipments for the next several quarters, and to reduce the risk of supply chain delays to meet anticipated customer demand for the Company’s products. The $22.0 million increase in finished goods inventory at June 30, 2023 compared to December 31, 2022 reflects an increase in completed tools not yet shipped to the customer, and a higher value of first-tools under evaluation by existing or prospective customers, due to shipments made, net of customer acceptances during the period.

The Company’s products each require a certain degree of customization, and the substantial majority of the work-in-process inventory and finished goods inventory is built to meet a specific customer order for repeat shipment of first tool delivery. At the end of each period, the Company assesses the status of each item in work-in-process and finished goods and inventory. The Company recognizes a loss or impairment if in management’s judgement the inventory cannot be sold or used for production, if it has been damaged` or should be considered as obsolete, or if the net realizable value is lower than the cost.

At the end of each period, the Company also assesses the status of its raw materials. The Company recognizes a loss or impairment for any raw materials aged more than three years, for which the Company determines it is not likely to be used in future production, or for which similar materials have not been used for more than six months. The three-year aging is based on the Company’s assessment of technology change, its requirement to maintain stock for warranty coverage, and other factors.

During the three months ended June 30, 2023 and 2022, inventory write-downs of $2,919 and $0 were recognized in cost of revenue, respectively. During the six months ended June 30, 2023 and 2022, inventory write-downs of $3,224 and $582 were recognized in cost of revenue, respectively. Write-downs were due to an internal assessment that certain inventory could not be sold or used for production due to damage or obsolescence.