Operating Segment, Geographic and Significant Customer Information

12 Months Ended

Dec. 31, 2021

Operating Segment, Geographic and Significant Customer Information

T.    OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

Teradyne has four reportable segments (Semiconductor Test, System Test, Wireless Test and Industrial Automation). Each of the reportable segment represents an individual operating segment. On September 15, 2020, Teradyne announced the appointment of Gregory Smith as President of Teradyne’s Industrial Automation reportable segment effective October 1, 2020. With the appointment of Gregory Smith, the Industrial Automation reportable segment is considered one operating segment and one reporting unit. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The System Test segment includes operations related to the design, manufacturing and marketing of products and services for storage and system level test, defense/aerospace instrumentation test, and circuit-board test. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robotic arms, autonomous mobile robots and advanced robotic control software.

Teradyne evaluates performance based on several factors, of which the primary financial measure is business segment income (loss) before income taxes. The accounting policies of the business segments are the same as those described in Note B: “Accounting Policies.”

Segment information for the years ended December 31, 2021, 2020, and 2019 is as follows:

	Semiconductor Test		System Test		Industrial Automation			Wireless Test		Corporate and Other			Consolidated
	(in thousands)
2021
Revenues	$	2,642,342	$	467,739	$	375,905		$	216,895	$	—		$	3,702,881
Income (loss) before taxes (1)(2)		976,988		163,064		(8,167	)		83,543		(54,473	)		1,160,955
Total assets (3)		1,245,596		170,954		701,196			107,513		1,584,166			3,809,425
Property additions		115,618		3,905		9,821			3,128		—			132,472
Depreciation and amortization expense		75,982		3,156		27,336			6,055		12,956			125,485
2020
Revenues	$	2,259,597	$	409,729	$	279,731		$	173,016	$	(604	)	$	3,121,469
Income (loss) before taxes (1)(2)		739,695		152,092		(24,019	)		41,950		(8,703	)		901,015
Total assets (3)		1,070,378		138,295		712,936			106,273		1,624,464			3,652,346
Property additions		168,055		3,092		8,899			4,931		—			184,977
Depreciation and amortization expense		64,998		3,426		36,242			6,258		15,819			126,743
2019
Revenues	$	1,552,571	$	287,455	$	298,139		$	157,315	$	(515	)	$	2,294,965
Income (loss) before taxes (1)(2)		416,973		93,543		(5,916	)		35,585		(14,413	)		525,772
Total assets (3)		784,808		131,428		671,559			97,299		1,101,920			2,787,014
Property additions		112,145		3,059		9,076			10,362		—			134,642
Depreciation and amortization expense		59,197		5,518		40,904			5,365		9,671			120,655

(1) Included in Corporate and Other are: loss on convertible debt conversions, contingent consideration adjustments, investment impairment, interest income, interest expense, pension and postretirement plan actuarial gains (losses), severance charges, net foreign exchange gains (losses), intercompany eliminations and acquisition related: (a) charges; (b) legal fees; (c) compensation.

(2) Included in income (loss) before taxes are charges and credits related to restructuring and other, loss on convertible debt conversions and inventory charges.

(3) Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

Included in each segment are charges and credits in the following line items in the statements of operations:

	For the Years Ended December 31,
	2021			2020			2019
	(in thousands)
Semiconductor Test:
Cost of revenues—inventory charge	$	6,661		$	11,013		$	8,731
Contract termination settlement fee		—			4,000			—
Restructuring and other—employee severance		—			—			1,277
System Test:
Cost of revenues—inventory charge	$	641		$	887		$	2,000
Industrial Automation:
Cost of revenues—inventory charge	$	6,403		$	834		$	508
Restructuring and other—employee severance		1,210			1,584			796
Restructuring and other—acquisition related expenses and compensation		1,000			985			741
Wireless:
Cost of revenues—inventory charge	$	1,770		$	4,800		$	4,005
Corporate and Other:
Other (income) expense, net—loss on convertible debt conversion	$	28,828		$	—		$	—
Restructuring and other—other		13,971			—			—
Restructuring and other—AutoGuide contingent consideration adjustment		(7,227	)		(19,724	)		2,976
Restructuring and other—acquisition related expenses and compensation		(513	)		1,728			1,765
Restructuring and other—MiR contingent consideration adjustment		—			(3,546	)		(22,199	)
Other (income) expense, net—investment impairment charge		—			—			15,000
Selling and administrative—equity modification charge		—			766			2,108

Information as to Teradyne’s revenues by country is as follows:

	2021		2020		2019
	(in thousands)
Revenues from customers (1):
Taiwan	$	1,117,874	$	1,178,068	$	485,681
China		631,963		465,722		514,327
Korea		502,167		391,571		239,504
United States		392,626		321,674		333,059
Europe		259,954		205,587		219,015
Philippines		166,838		68,887		54,560
Japan		166,231		143,983		175,322
Thailand		138,812		138,787		87,503
Malaysia		136,774		56,096		58,200
Singapore		121,582		76,460		84,111
Rest of the World		68,060		74,634		43,683
	$	3,702,881	$	3,121,469	$	2,294,965

(1) Revenues attributable to a country are based on location of customer site.

In 2021 and 2020, revenues from Taiwan Semiconductor Manufacturing Company Ltd., a customer of Teradyne’s Semiconductor Test segment, accounted for 12% and 15%, respectively, of Teradyne’s consolidated revenues. In 2019, no single direct customer accounted for more than 10% of Teradyne’s consolidated revenues. Teradyne estimates consolidated revenues driven by one OEM customer, combining direct sales to that customer with sales to the customer’s OSATs (which include Taiwan Semiconductor Manufacturing Company Ltd.), accounted for approximately 19%, 25% and 10% of its consolidated revenues in 2021, 2020 and 2019,

respectively. Teradyne estimates consolidated revenues driven by Huawei Technologies Co., Ltd. (“Huawei”), combining direct sales to that customer with sales to the customer’s OSATs, accounted for approximately 0%, 3% and 11% of its consolidated revenues in 2021, 2020 and 2019, respectively.

Long-lived assets by geographic area:

	United States		Foreign(1)		Total
	(in thousands)
December 31, 2021	$	308,438	$	147,609	$	456,047
December 31, 2020	$	291,234	$	158,135	$	449,369

(1) As of December 31, 2021 and 2020, long-lived assets attributable to Singapore were $39.4 million and $62.5 million, respectively.