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Industry Segment Operations
 12 Months Ended
Oct. 30, 2022
Segment Reporting [Abstract]  
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 October 30, 2022 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 other display technologies for TVs, monitors, laptops, personal computers, smart phones, other consumer-oriented devices and solar energy cells.
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.
Information for each reportable segment for and as of the end of each fiscal year were as follows:
 
Net SalesOperating
Income (Loss)		Depreciation/
Amortization		Capital
Expenditures		Accounts ReceivableInventories
 (In millions)
2022:
Semiconductor Systems $18,797 $6,969 $203 $249 $4,924 $3,995 
Applied Global Services5,543 1,661 31 38 997 1,788 
Display and Adjacent Markets1,331 260 31 30 148 129 
Corporate and Other114 (1,102)179 470 (1)20 
Total$25,785 $7,788 $444 $787 $6,068 $5,932 
2021:
Semiconductor Systems$16,286 $6,311 $194 $228 $3,886 $2,586 
Applied Global Services5,013 1,508 32 29 922 1,561 
Display and Adjacent Markets1,634 314 27 32 207 153 
Corporate and Other130 (1,244)141 379 (62)9 
Total$23,063 $6,889 $394 $668 $4,953 $4,309 
2020:
Semiconductor Systems$11,367 $3,714 $219 $226 $2,061 $2,139 
Applied Global Services4,155 1,127 34 30 764 1,545 
Display and Adjacent Markets1,607 291 31 29 179 195 
Corporate and Other73 (767)92 137 (41)25 
Total$17,202 $4,365 $376 $422 $2,963 $3,904 
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 fiscal 2021 included severance and related charges as discussed in Note 12, Severance and Related Charges and a $154 million deal termination fee associated with the termination of a Share Purchase Agreement with Kokusai Electric Corporation and KKR HKE Investment L. P. during the second quarter of fiscal 2021.
Net sales for Semiconductor Systems by end use application for the periods indicated were as follows:
202220212020
Foundry, logic and other66 %60 %59 %
Dynamic random-access memory (DRAM)19 %19 %20 %
Flash memory15 %21 %21 %
100 %100 %100 %
The reconciling items included in Corporate and Other were as follows:
202220212020
 (In millions)
Unallocated net sales$114 $130 $73 
Unallocated cost of products sold and expenses(807)(725)(533)
Share-based compensation(413)(346)(307)
Severance and related charges4 (149)— 
Deal termination fee— (154)— 
Total$(1,102)$(1,244)$(767)

For geographical reporting, revenue by geographic location is determined by the location of customers’ facilities to which products were shipped. Long-lived assets consist primarily of property, plant and equipment and right-of-use assets and are attributed to the geographic location in which they are located. Fiscal 2021 long-lived asset amount has been updated to include right-of-use assets to conform with the current year presentation. Net sales and long-lived assets by geographic region for and as of each fiscal year were as follows:
 
202220212020
 (In millions)
Net sales:
United States$3,104 $2,038 $1,619 
China7,254 7,535 5,456 
Korea4,395 5,012 3,031 
Taiwan6,262 4,742 3,953 
Japan2,012 1,962 1,996 
Europe1,674 1,097 736 
Southeast Asia1,084 677 411 
Total outside United States22,681 21,025 15,583 
Consolidated total$25,785 $23,063 $17,202 


October 30,
2022		October 31,
2021
 (In millions)
Long-lived assets:
United States$2,725 $2,241 
China6 10 
Korea14 16 
Taiwan62 62 
Japan7 9 
Europe75 25 
Southeast Asia8 18 
Total outside United States172 140 
Consolidated total$2,897 $2,381 
The following customers accounted for at least 10 percent of Applied’s net sales in each fiscal year, which were for products and services in multiple reportable segments:
202220212020
Samsung Electronics Co., Ltd.12 %20 %18 %
Taiwan Semiconductor Manufacturing Company Limited20 %15 %18 %
Intel Corporation10 %**
___________________________
* Less than 10%