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GOODWILL AND PURCHASED INTANGIBLE ASSETS
 6 Months Ended
Dec. 31, 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 three reportable segments and five operating segments. The operating segments are determined to be the same as reporting units. For additional details, refer to Note 18 “Segment Reporting and Geographic Information” to our Condensed Consolidated Financial Statements. The following table presents changes in goodwill carrying value during the six months ended December 31, 2022:
(In thousands)Wafer Inspection and Patterning
Global Service and Support (“GSS”)
Specialty Semiconductor ProcessPrinted Circuit Board (“PCB”) and DisplayComponent InspectionTotal
Balance as of June 30, 2022$725,737 $25,908 $681,858 $872,971 $13,575 $2,320,049 
Acquired goodwill6,776 — — — — 6,776 
Goodwill disposal from sale of business (1)
— — — (42,622)— (42,622)
Goodwill adjustments(5,337)— — — — (5,337)
Foreign currency adjustments(57)— — — — (57)
Balance as of December 31, 2022$727,119 $25,908 $681,858 $830,349 $13,575 $2,278,809 
(1) Refer to the “Business Dispositions” section of Note 6 “Business Combinations and Dispositions” for more information on the sale of Orbograph.
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 completed the required annual testing of goodwill for impairment for all reporting units as of February 28, 2022 and concluded there was no goodwill impairment as a result of that assessment.
There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the annual assessment performed in the third quarter of the fiscal year ended June 30, 2022.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands) As of December 31, 2022As of June 30, 2022
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
$1,536,826 $750,923 $785,903 $1,523,691 $668,175 $855,516 
Customer relationships
4-9
358,567 185,462 173,105 366,567 167,819 198,748 
Trade name / Trademark
4-7
116,583 71,281 45,302 121,083 68,194 52,889 
Order backlog and other
<1-9
85,836 70,411 15,425 87,836 58,970 28,866 
Intangible assets subject to amortization(1)
2,097,812 1,078,077 1,019,735 2,099,177 963,158 1,136,019 
In-process research and development61,322 15,966 45,356 64,457 6,062 58,395 
Total$2,159,134 $1,094,043 $1,065,091 $2,163,634 $969,220 $1,194,414 
(1) The disposition of Orbograph during the three months ended September 30, 2022 resulted in a decrease in the gross amount of intangible assets subject to amortization of $34.5 million, a decrease in accumulated amortization of $15.9 million, and a decrease in the net amount of $18.6 million. Refer to the “Business Dispositions” section of Note 6 “Business Combinations and Dispositions” for more information on the sale of Orbograph.
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 December 31, 2022, there were no impairment indicators for purchased intangible assets.
Amortization expense for purchased intangible assets for the periods indicated below was as follows:
Three Months Ended December 31,Six Months Ended December 31,
(In thousands)2022202120222021
Amortization expense - Costs of revenues$45,446 $41,124 $90,512 $82,248 
Amortization expense - SG&A20,128 12,389 40,256 24,778 
Amortization expense - Research and development31 31 62 62 
Total $65,605 $53,544 $130,830 $107,088 
Based on the purchased intangible assets gross carrying amount recorded as of December 31, 2022, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30:Amortization (In thousands)
2023 (remaining six months)$129,787 
2024238,575 
2025222,123 
2026206,211 
2027129,630 
2028 and thereafter93,409 
Total$1,019,735