XML 41 R27.htm IDEA: XBRL DOCUMENT v3.20.2
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 12 Months Ended
Jun. 30, 2020
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 (“SPC”) segment offers comprehensive portfolio of inspection, metrology and data analytics products, and related service, which helps integrated circuit manufacturers achieve target yield throughout the entire semiconductor fabrication process-from research and development (“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 (“MEMS”), radio frequency (“RF”) 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 enable electronic device manufacturers to inspect, test and measure printed circuit boards (“PCBs”), flat panel displays (“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
We engage 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. This reportable 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 is included in our Other reportable segment, for a total consideration of $1.7 million.
The CODM assesses the performance of each operating segment and allocates resources to those segments based on total revenue and segment gross margin and does not evaluate the segments using discrete asset information. Segment gross margin excludes corporate allocation and effects of foreign 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)202020192018
Semiconductor Process Control:
Revenue$4,745,446  $4,080,822  $3,944,015  
Segment gross margin$3,028,167  $2,590,434  $2,554,223  
Specialty Semiconductor Process:
Revenue$329,700  $151,164  $—  
Segment gross margin$183,641  $78,800  $—  
PCB, Display and Component Inspection:
Revenue$727,451  $332,810  $92,516  
Segment gross margin$315,723  $155,765  $38,428  
Other:
Revenue$3,614  $4,676  $—  
Segment gross margin$(63) $1,102  $—  
Totals:
Revenue$5,806,211  $4,569,472  $4,036,531  
Segment gross margin$3,527,468  $2,826,101  $2,592,651  
The following table reconciles total reportable segment revenue to total revenue for the indicated periods:
 Year ended June 30,
(In thousands)202020192018
Total revenue for reportable segments$5,806,211  $4,569,472  $4,036,531  
Corporate allocations and effects of foreign exchange rates213  (568) 170  
Total revenue$5,806,424  $4,568,904  $4,036,701  
The following table reconciles total segment gross margin to total income before income taxes for the indicated periods:
 Year ended June 30,
(In thousands)202020192018
Total segment gross margin $3,527,468  $2,826,101  $2,592,651  
Acquisition-related charges, corporate allocations and effects of foreign exchange rates(1)
170,605  126,574  1,991  
Research and development863,864  711,030  608,531  
Selling, general and administrative734,149  599,124  442,304  
Goodwill impairment256,649  —  —  
Interest expense160,274  124,604  114,376  
Loss on extinguishment of debt22,538  —  —  
Other expense (income), net2,678  (31,462) (30,482) 
Income before income taxes$1,316,711  $1,296,231  $1,455,931  
__________________
(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 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)Year ended June 30,
202020192018
Revenues:
Taiwan$1,566,823  27 %$1,105,726  24 %$636,363  16 %
China1,457,579  25 %1,215,807  27 %643,033  16 %
Korea982,171  17 %584,091  13 %1,178,601  29 %
Japan670,287  12 %581,529  13 %638,358  16 %
United States657,550  11 %596,452  13 %494,330  12 %
Europe and Israel318,483  5 %305,924  7 %300,883  7 %
Rest of Asia153,531  3 %179,375  3 %145,133  4 %
Total$5,806,424  100 %$4,568,904  100 %$4,036,701  100 %
The following is a summary of revenues by major products for the indicated periods:
(Dollar amounts in thousands)Year ended June 30,
202020192018
Revenues:
Wafer Inspection$2,080,484  36 %$1,630,899  36 %$1,714,421  42 %
Patterning1,278,382  22 %1,161,263  25 %1,133,410  29 %
Specialty Semiconductor Process269,667  5 %129,854  3 %—  — %
PCB, Display and Component Inspection497,026  9 %238,275  5 %85,836  2 %
Services1,477,699  25 %1,176,661  26 %876,030  22 %
Other203,166  3 %231,952  5 %227,004  5 %
Total$5,806,424  100 %$4,568,904  100 %$4,036,701  100 %
Wafer Inspection, and Patterning products are offered in 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 Semiconductor Process Control segment.
In the fiscal year ended June 30, 2020, two customers accounted for approximately 20% and 14% of total revenues. In the fiscal year ended June 30, 2019, one customer accounted for approximately 15% of total revenues. In the fiscal year ended June 30, 2018, one customer accounted for approximately 21% of total revenues.
Long-lived assets by geographic region as of the dates indicated below were as follows:
 As of June 30,
(In thousands)20202019
Long-lived assets:
United States$329,558  $253,255  
Israel59,162  66,082  
Europe58,065  62,027  
Singapore54,946  49,523  
Rest of Asia18,093  17,912  
Total$519,824  $448,799