XML 32 R22.htm IDEA: XBRL DOCUMENT v3.23.1
Industry Segment Operations
 6 Months Ended
Apr. 30, 2023
Segment Reporting [Abstract]  
Industry Segment Operations Industry Segment Operations
Our three reportable segments are: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. As defined under the accounting literature, our 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 our management organization structure as of April 30, 2023 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to our 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 our 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 our chief operating decision-maker. The chief operating decision-maker does not evaluate operating segments using total asset information.
We derive the segment results directly from our internal management reporting system. The accounting policies we use 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 our 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, we do not allocate to our 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 EndedSix Months Ended
Net SalesOperating
Income (Loss)		Net SalesOperating
Income (Loss)
 (In millions)
April 30, 2023:
Semiconductor Systems$4,977 $1,764 $10,139 $3,681 
Applied Global Services1,428 414 2,797 797 
Display and Adjacent Markets168 21 335 29 
Corporate and Other57 (288)98 (626)
Total$6,630 $1,911 $13,369 $3,881 
May 1, 2022:
Semiconductor Systems$4,458 $1,648 $9,025 $3,419 
Applied Global Services1,383 422 2,703 825 
Display and Adjacent Markets381 81 747 157 
Corporate and Other23 (257)41 (531)
Total$6,245 $1,894 $12,516 $3,870 
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.
Net sales by geographic region, determined by the location of customers’ facilities to which products were shipped to, were as follows:
Three Months EndedSix Months Ended
 April 30,
2023		May 1,
2022		ChangeApril 30,
2023		May 1,
2022		Change
 (In millions, except percentages)
China$1,405 21 %$2,133 34 %(34)%$2,550 19 %$4,120 33 %(38)%
Korea1,583 24 %968 16 %64 %2,876 22 %2,089 17 %38 %
Taiwan1,435 22 %1,408 23 %2 %3,403 25 %2,657 21 %28 %
Japan460 7 %407 6 %13 %916 7 %968 8 %(5)%
Southeast Asia157 2 %138 2 %14 %410 3 %363 3 %13 %
Asia Pacific5,040 76 %5,054 81 %— %10,155 76 %10,197 82 %— %
United States1,113 17 %702 11 %59 %2,164 16 %1,549 12 %40 %
Europe477 7 %489 8 %(2)%1,050 8 %770 6 %36 %
Total$6,630 100 %$6,245 100 %6 %$13,369 100 %$12,516 100 %7 %

Net sales for Semiconductor Systems by end use application for the periods indicated were as follows:
Three Months EndedSix Months Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
Foundry, logic and other84 %65 %81 %63 %
Dynamic random-access memory (DRAM)11 %21 %12 %23 %
Flash memory5 %14 %7 %14 %
100 %100 %100 %100 %
The reconciling items included in Corporate and Other were as follows: 

Three Months EndedSix Months Ended
April 30,
2023		May 1,
2022		April 30,
2023		May 1,
2022
 (In millions)
Unallocated net sales$57 $23 $98 $41 
Unallocated cost of products sold and expenses(232)(179)(463)(357)
Share-based compensation(113)(101)(261)(219)
Severance and related charges— — — 4 
Total$(288)$(257)$(626)$(531)


The following customers accounted for at least 10 percent of our net sales for the six months ended April 30, 2023, and sales to these customers included products and services from multiple reportable segments.
 
Percentage of Net Sales
Taiwan Semiconductor Manufacturing Company Limited23 %
Samsung Electronics Co., Ltd.19 %