XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.22.2

GOODWILL AND PURCHASED INTANGIBLE ASSETS | 12 Months Ended
--- | ---
Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND PURCHASED INTANGIBLE ASSETS | GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combinations. We have four reportable segments and six operating segments. The operating segments are determined to be the same as reporting units. The following table presents goodwill carrying value and the movements by reporting unit during the fiscal years ended June 30, 2022 and 2021(1):
(In thousands) |  | Wafer Inspection and Patterning |  | Global Service and Support (“GSS”) |  | Specialty Semiconductor Process |  | PCB and Display |  | Component Inspection |  | Total
Balance as of June 30, 2020 |  | $ | 416,840 |  |  | $ | 25,908 |  |  | $ | 681,858 |  |  | $ | 907,221 |  |  | $ | 13,575 |  |  | $ | 2,045,402 |
Goodwill disposal from sale of business(2) |  | — |  |  | — |  |  | — |  |  | (34,250) |  |  | — |  |  | (34,250) |
Foreign currency adjustment |  | 20 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 20 |
Balance as of June 30, 2021 |  | 416,860 |  |  | 25,908 |  |  | 681,858 |  |  | 872,971 |  |  | 13,575 |  |  | 2,011,172 |
Acquired goodwill |  | 308,952 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 308,952 |
Foreign currency adjustment |  | (75) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (75) |
Balance as of June 30, 2022 |  | $ | 725,737 |  |  | $ | 25,908 |  |  | $ | 681,858 |  |  | $ | 872,971 |  |  | $ | 13,575 |  |  | $ | 2,320,049 |
_________________ (1)No goodwill was assigned to the Other reporting unit, and accordingly is not disclosed in the table above. (2)Refer to the Non-controlling Interest section of Note 10 “Equity, Long-term Incentive Compensation Plans and Non-Controlling Interest” for more information on the sale of PixCell Medical Technologies Ltd. (“PixCell”). Goodwill is not subject to amortization but is tested for impairment annually during the third fiscal quarter, as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We performed the required annual goodwill impairment tests as of February 28, 2022 and 2021, and concluded that goodwill was not impaired. As a result of our qualitative assessments, we determined that it was not necessary to perform the quantitative assessments at those times. The required annual goodwill impairment tests for our fiscal year ended June 30, 2020 were performed as of February 28, 2020. We completed qualitative assessments for all reporting units and concluded that goodwill was not impaired for the Wafer Inspection and Patterning, Global Service and Support, and Component Inspection reporting units. However, due to the downward revision of the financial outlook for the Specialty Semiconductor Process and PCB and Display reporting units as well as the impact of the elevated risk and macroeconomic slowdown driven by the COVID-19 pandemic, we performed a quantitative goodwill impairment assessment for these two reporting units. As a result of the assessment, we recorded $144.2 million and $112.5 million in impairment charges in the Specialty Semiconductor Process and PCB and Display reporting units, respectively, during the quarter ended March 31, 2020. Goodwill as of June 30, 2022, 2021 and 2020 is net of accumulated impairment losses of $534.2 million, of which $277.6 million was included in the Wafer Inspection and Patterning reporting unit, $144.2 million was included in the Specialty Semiconductor Process reporting unit, and $112.5 million was included in the PCB and Display reporting unit. There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the assessment performed in the third quarter of the fiscal year ended June 30, 2022. The next annual assessment of goodwill by reporting unit is scheduled to be performed in the third quarter of the fiscal year ending June 30, 2023. Purchased Intangible Assets The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands) |  |  | As of June 30, 2022 |  | As of June 30, 2021
Category | Range of Useful Lives (in years) |  | Gross Carrying Amount |  | Accumulated Amortization and Impairment |  | Net Amount |  | Gross Carrying Amount |  | Accumulated Amortization and Impairment |  | Net Amount
Existing technology | 4-8 |  | $ | 1,523,691 |  |  | $ | 668,175 |  |  | $ | 855,516 |  |  | $ | 1,382,612 |  |  | $ | 499,219 |  |  | $ | 883,393 |
Customer relationships | 4-9 |  | 366,567 |  |  | 167,819 |  |  | 198,748 |  |  | 305,817 |  |  | 131,386 |  |  | 174,431 |
Trade name/trademark | 4-7 |  | 121,083 |  |  | 68,194 |  |  | 52,889 |  |  | 117,383 |  |  | 53,493 |  |  | 63,890 |
Order backlog and other | <1-9 |  | 87,836 |  |  | 58,970 |  |  | 28,866 |  |  | 50,403 |  |  | 49,962 |  |  | 441 |
Intangible assets subject to amortization |  |  | 2,099,177 |  |  | 963,158 |  |  | 1,136,019 |  |  | 1,856,215 |  |  | 734,060 |  |  | 1,122,155 |
IPR&D |  |  | 64,457 |  |  | 6,062 |  |  | 58,395 |  |  | 63,256 |  |  | 100 |  |  | 63,156 |
Total |  |  | $ | 2,163,634 |  |  | $ | 969,220 |  |  | $ | 1,194,414 |  |  | $ | 1,919,471 |  |  | $ | 734,160 |  |  | $ | 1,185,311 |
Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. Impairment indicators primarily include the declines in our operating cash flows from the use of these assets. If impairment indicators are present, we are required to perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to these long-lived assets to their carrying value. As of June 30, 2022 and 2021, there were no impairment indicators for purchased intangible assets. Amortization expense for purchased intangible assets for the periods indicated below was as follows:
| Year Ended June 30,
(In thousands) | 2022 |  | 2021 |  | 2020
Amortization expense - Cost of revenues | $ | 168,957 |  |  | $ | 156,596 |  |  | $ | 145,823 |
Amortization expense - SG&A | 60,017 |  |  | 49,531 |  |  | 74,532 |
Amortization expense - R&D | 124 |  |  | 125 |  |  | 224 |
Total | $ | 229,098 |  |  | $ | 206,252 |  |  | $ | 220,579 |
Based on the purchased intangible assets’ gross carrying value recorded as of June 30, 2022, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal Year Ending June 30: | Amortization (In thousands)
2023 | $ | 260,161 |
2024 | 237,723 |
2025 | 221,421 |
2026 | 205,407 |
2027 | 127,861 |
Thereafter | 83,446 |
Total | $ | 1,136,019 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration