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Operating Segment, Geographic and Significant Customer Information
 12 Months Ended
Dec. 31, 2020
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, 2020, 2019, and 2018 is as follows:
 
 
 
Semiconductor

Test
 
 
System

Test
 
 
Industrial

Automation
 
 
Wireless

Test
 
 
Corporate

and Other
 
 
Consolidated
 
 
 
(in thousands)
 
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
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
1,492,417
 
 
$
216,132
 
 
$
261,452
 
 
$
132,006
 
 
$
(1,205
) 
 
$
2,100,802
 
Income (loss) before taxes (1)(2)
 
 
397,645
 
 
 
48,857
 
 
 
7,670
 
 
 
29,052
 
 
 
(15,423
) 
 
 
467,801
 
Total assets (3)
 
 
669,452
 
 
 
88,098
 
 
 
607,502
 
 
 
77,570
 
 
 
1,263,984
 
 
 
2,706,606
 
Property additions
 
 
94,496
 
 
 
3,469
 
 
 
11,188
 
 
 
5,226
 
 
 
 —
 
 
 
 
114,379
 
Depreciation and amortization expense
 
 
58,095
 
 
 
6,430
 
 
 
36,755
 
 
 
5,328
 
 
 
6,616
 
 
 
113,224
 
 
(1)
Included in Corporate and Other are: contingent consideration adjustments, investment impairment, pension and postretirement plans actuarial gains (losses), severance charges, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations and acquisition related charges.
(2)
Included in income (loss) before taxes are charges and credits related to restructuring and other, 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 Year Ended December 31,
 
 
  
2020
 
 
2019
 
 
2018
 
 
  
(in thousands)
 
Semiconductor Test:
  
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues—inventory charge
  
$
11,013
 
 
$
8,731
 
 
$
6,822
 
Contract termination settlement fee
  
 
4,000
 
 
 —  
 
 
 —  
 
Restructuring and other—employee severance
  
 
 —  
 
 
 
1,277
 
 
 
8,429
 
System Test:
  
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues—inventory charge
  
$
887
 
 
$
2,000
 
 
$
1,175
 
Industrial Automation:
  
 
 
 
 
 
 
 
 
 
 
 
Restructuring and other—acquisition related expenses and compensation
  
$
985
 
 
$
741
 
 
$
1,163
 
Cost of revenues—inventory charge
  
 
834
 
 
 
508
 
 
 
680
 
Restructuring and other—employee severance
  
 
1,584
 
 
 
796
 
 
 
 —  
 
Wireless:
  
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues—inventory charge
  
$
4,800
 
 
$
4,005
 
 
$
2,565
 
Corporate and Other:
  
 
 
 
 
 
 
 
 
 
 
 
Restructuring and other—AutoGuide contingent consideration adjustment
  
$
(19,724
) 
 
$
2,976
 
 
$
 —  
 
Restructuring and other—MiR contingent consideration adjustment
  
 
(3,546
) 
 
 
(22,199
) 
 
 
17,666
 
Restructuring and other—acquisition related expenses and compensation
  
 
1,728
 
 
 
1,765
 
 
 
3,422
 
Other (income) expense, net—investment impairment charge
  
 
 —  
 
 
 
15,000
 
 
 
 —  
 
Selling and administrative—equity modification charge
  
 
766
 
 
 
2,108
 
 
 
 —  
 
Restructuring and other—Universal Robots contingent consideration adjustment
  
 
 —  
 
 
 
 —  
 
 
 
(16,679
) 
Information as to Teradyne’s revenues by country is as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
2020
 
  
2019
 
  
2018
 
 
  
(in thousands)
 
Revenues from customers (1):
  
 
 
 
  
 
 
 
  
 
 
 
Taiwan
  
$
1,178,068
 
  
$
485,681
 
  
$
516,322
 
China
  
 
465,722
 
  
 
514,327
 
  
 
348,942
 
Korea
  
 
391,571
 
  
 
239,504
 
  
 
163,224
 
United States
  
 
321,674
 
  
 
333,059
 
  
 
282,869
 
Europe
  
 
205,587
 
  
 
219,015
 
  
 
223,207
 
Japan
  
 
143,983
 
  
 
175,322
 
  
 
158,281
 
Thailand
  
 
138,787
 
  
 
87,503
 
  
 
59,184
 
Singapore
  
 
76,460
 
  
 
84,111
 
  
 
108,618
 
Philippines
  
 
68,887
 
  
 
54,560
 
  
 
77,996
 
Malaysia
  
 
56,096
 
  
 
58,200
 
  
 
122,797
 
Rest of the World
  
 
74,634
 
  
 
43,683
 
  
 
39,362
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
  
$
3,121,469
 
  
$
2,294,965
 
  
$
2,100,802
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
(1)
Revenues attributable to a country are based on location of customer site.
In 2020, revenues from Taiwan Semiconductor Manufacturing Company Ltd., a customer of Teradyne’s Semiconductor Test segment, accounted for 15% of Teradyne’s consolidated revenues. In 2019 and 2018, 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 25%, 10% and 13% of its consolidated revenues in 2020, 2019 and 2018, 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 3% and 11% of its consolidated revenues in 2020 and 2019, respectively.
Long-lived assets by geographic area:
 
 
  
United States
 
  
Foreign(1)
 
  
Total
 
 
  
(in thousands)
 
December 31, 2020
  
$
291,234
 
  
$
158,135
 
  
$
449,369
 
December 31, 2019
  
$
252,812
 
  
$
124,943
 
  
$
377,755
 
 
(1)
As of December 31, 2020 and 2019, long-lived assets attributable to Singapore were $62.5 million and $35.2 million, respectively.