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Industry Segment Operations
 9 Months Ended
Aug. 01, 2021
Segment Reporting [Abstract]  
Industry Segment Operations Industry Segment Operations
Applied’s three reportable segments are: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. As defined under the accounting literature, Applied’s chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Applied’s management organization structure as of August 1, 2021 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to Applied’s reportable segments.
The Semiconductor Systems reportable segment includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation.
The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, certain remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products.
The Display and Adjacent Markets segment includes products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), equipment upgrades and flexible coating systems and other display technologies for TVs, monitors, laptops, personal computers, smart phones, and other consumer-oriented devices.
Each operating segment is separately managed and has separate financial results that are reviewed by Applied’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating income is determined based upon internal performance measures used by Applied’s chief operating decision-maker. The chief operating decision-maker does not evaluate operating segments using total asset information.
Applied derives the segment results directly from its internal management reporting system. The accounting policies Applied uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics including orders, net sales and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments.
The Corporate and Other category includes revenues from products, as well as costs of products sold, for fabricating solar photovoltaic cells and modules, and certain operating expenses that are not allocated to its reportable segments and are managed separately at the corporate level. These operating expenses include costs related to share-based compensation; certain management, finance, legal, human resources, and research, development and engineering functions provided at the corporate level; and unabsorbed information technology and occupancy. In addition, Applied does not allocate to its reportable segments restructuring, severance and asset impairment charges and any associated adjustments related to restructuring actions, unless these actions pertain to a specific reportable segment. Segment operating income also excludes interest income/expense and other financial charges and income taxes. Management does not consider the unallocated costs in measuring the performance of the reportable segments.
Net sales and operating income (loss) for each reportable segment were as follows:
Three Months EndedNine Months Ended
Net SalesOperating
Income (Loss)		Net SalesOperating
Income (Loss)
 (In millions)
August 1, 2021:
Semiconductor Systems$4,454 $1,785 $11,979 $4,588 
Applied Global Services1,286 393 3,644 1,083 
Display and Adjacent Markets431 99 1,217 229 
Corporate and Other25 (264)100 (1,025)
Total$6,196 $2,013 $16,940 $4,875 
July 26, 2020:
Semiconductor Systems$2,916 $958 $8,297 $2,655 
Applied Global Services1,034 273 3,049 807 
Display and Adjacent Markets425 83 1,122 196 
Corporate and Other20 (206)46 (576)
Total$4,395 $1,108 $12,514 $3,082 
Semiconductor Systems and Display and Adjacent Markets revenues are recognized at a point in time. Applied Global Services revenue is recognized at a point in time for tangible goods such as spare parts and equipment, and over time for service agreements. The majority of revenue recognized over time is recognized within 12 months of the contract inception.
Operating income (loss) for the nine months ended August 1, 2021 included severance and related charges as discussed in Note 13, Severance and Related Charges and a deal termination fee as discussed in Note 9, Business Combination.
Net sales by geographic region, determined by the location of customers’ facilities to which products were shipped to, were as follows:
Three Months EndedNine Months Ended
 August 1,
2021		July 26,
2020		ChangeAugust 1,
2021		July 26,
2020		Change
 (In millions, except percentages)
China$2,251 36 %$1,470 33 %53 %$5,478 32 %$3,880 31 %41 %
Korea1,291 21 %1,051 24 %23 %4,008 23 %2,312 18 %73 %
Taiwan1,261 20 %687 16 %84 %3,502 21 %3,081 25 %14 %
Japan449 7 %472 11 %(5)%1,349 8 %1,290 10 %5 %
Southeast Asia173 3 %120 2 %44 %472 3 %250 2 %89 %
Asia Pacific5,425 87 %3,800 86 %43 %14,809 87 %10,813 86 %37 %
United States533 9 %399 9 %34 %1,365 8 %1,171 10 %17 %
Europe238 4 %196 5 %21 %766 5 %530 4 %45 %
Total$6,196 100 %$4,395 100 %41 %$16,940 100 %$12,514 100 %35 %
Net sales for Semiconductor Systems by end use application for the periods indicated were as follows:
Three Months EndedNine Months Ended
August 1,
2021		July 26,
2020		August 1,
2021		July 26,
2020
Foundry, logic and other63 %55 %59 %60 %
Dynamic random-access memory (DRAM)20 %22 %17 %19 %
Flash memory17 %23 %24 %21 %
100 %100 %100 %100 %

The reconciling items included in Corporate and Other were as follows: 
Three Months EndedNine Months Ended
August 1,
2021		July 26,
2020		August 1,
2021		July 26,
2020
 (In millions)
Unallocated net sales$25 $20 $100 $46 
Unallocated cost of products sold and expenses(208)(156)(549)(388)
Share-based compensation(81)(70)(272)(234)
Severance and related charges— — (150)— 
Deal termination fee— — (154)— 
Total$(264)$(206)$(1,025)$(576)

The following customers accounted for at least 10 percent of Applied’s net sales for the nine months ended August 1, 2021, and sales to these customers included products and services from multiple reportable segments.
 
Percentage of Net Sales
Taiwan Semiconductor Manufacturing Company Limited16 %
Samsung Electronics Co., Ltd.23 %