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Segment Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Information

 

20.

SEGMENT INFORMATION

The Company designs, develops, manufactures and markets a broad range of products, including discrete and standard commodity components ASICs, full custom devices and semi-custom devices and ASSPs” for analog, digital, and mixed-signal applications.  In addition, the Company further participates in the manufacturing value chain of smartcard products, which includes the production and sale of both silicon chips and smartcards.

The Company’s reportable segments are as follows:

 

•

Automotive and Discrete Group (ADG), comprised of dedicated automotive ICs, and discrete and power transistor products.

 

•

Analog, MEMS and Sensors Group (AMS), comprised of analog, smart power, low power RF, MEMS sensors and actuators, and optical sensing solutions.

 

•

Microcontrollers and Digital ICs Group (MDG), comprised of microcontrollers (general purpose and secure), memories (RF and EEPROM), and RF communications.

For the computation of the segments’ internal financial measurements, the Company uses certain internal rules of allocation for the costs not directly chargeable to the segments, including cost of sales, SG&A expenses and a part of R&D expenses.  In compliance with the Company’s internal policies, certain costs are not allocated to the segments, but reported in “Others”.  Those comprise unused capacity charges, including reduced manufacturing activity due to COVID-19, impairment, restructuring charges and other related closure costs, management reorganization expenses, phase-out and start-up costs of certain manufacturing facilities, and other

unallocated expenses such as: strategic or special R&D programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of other products.  In addition, depreciation and amortization expense is part of the manufacturing costs allocated to the segments and is neither identified as part of the inventory variation nor as part of the unused capacity charges; therefore, it cannot be isolated in cost of sales. Finally, public grants are allocated to the Company’s segments proportionally to the incurred expenses on the sponsored projects.

Wafer costs are allocated to the segments based on actual cost.  From time to time, with respect to specific technologies, wafer costs are allocated to segments based on market price.

The following tables present the Company’s consolidated net revenues and consolidated operating income by reportable segment.

Net revenues by reportable segment:

 

 

 

December 31,

2021

 

 

December 31,

2020

 

 

December 31,

2019

 

ADG

 

 

4,350

 

 

 

3,284

 

 

 

3,606

 

AMS

 

 

4,623

 

 

 

3,892

 

 

 

3,299

 

MDG

 

 

3,766

 

 

 

3,030

 

 

 

2,638

 

Total net revenues of product segments

 

 

12,739

 

 

 

10,206

 

 

 

9,543

 

Others

 

 

22

 

 

 

13

 

 

 

13

 

Total consolidated net revenues

 

 

12,761

 

 

 

10,219

 

 

 

9,556

 

 

Operating income by reportable segment:

 

 

 

December 31,

2021

 

 

December 31,

2020

 

 

December 31,

2019

 

ADG

 

 

512

 

 

 

182

 

 

 

357

 

AMS

 

 

1,015

 

 

 

810

 

 

 

596

 

MDG

 

 

915

 

 

 

504

 

 

 

354

 

Total operating income of product segments

 

 

2,442

 

 

 

1,496

 

 

 

1,307

 

Others(1)

 

 

(23

)

 

 

(173

)

 

 

(104

)

Total consolidated operating income

 

 

2,419

 

 

 

1,323

 

 

 

1,203

 

 

(1)

Operating income (loss) of “Others” includes items such as unused capacity charges, including reduced manufacturing activity due to COVID-19, impairment, restructuring charges and other related closure costs, management reorganization costs, phase out and start-up costs of certain manufacturing facilities, and other unallocated expenses such as: strategic or special R&D programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of other products.

 

The reconciliation of operating income of reportable segments to the total consolidated operating income is presented in the below table:

 

 

 

December 31,

2021

 

 

December 31,

2020

 

 

December 31,

2019

 

Total operating income of reportable segments

 

 

2,442

 

 

 

1,496

 

 

 

1,307

 

Impairment, restructuring charges and

   other related closure costs

 

 

(2

)

 

 

(11

)

 

 

(5

)

Unused capacity charges

 

 

(16

)

 

 

(153

)

 

 

(65

)

Other unallocated manufacturing results

 

 

1

 

 

 

(8

)

 

 

(25

)

Gain on sale of non-current assets

 

 

3

 

 

 

11

 

 

 

6

 

Strategic and other research and development

   programs and other non-allocated provisions(1)

 

 

(9

)

 

 

(12

)

 

 

(15

)

Total operating loss Others

 

 

(23

)

 

 

(173

)

 

 

(104

)

Total consolidated operating income

 

 

2,419

 

 

 

1,323

 

 

 

1,203

 

 

 

(1)

Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not allocated to the product segments.

The following is a summary of operations by entities located within the indicated geographic areas for 2021, 2020 and 2019.  Net revenues represent sales to third parties from the country in which each legal entity is incorporated.  Long-lived assets consist of property, plant and equipment, net.  A significant portion of property, plant and equipment expenditures is attributable to front-end and back-end facilities, located in the different countries in which the Company operates as reported on the consolidated balance sheets.  As such, the Company mainly allocates capital spending resources according to geographic areas rather than along product segment areas.

Net revenues

 

 

 

December 31,

2021

 

 

December 31,

2020

 

 

December 31,

2019

 

Netherlands

 

 

3,282

 

 

 

2,795

 

 

 

2,842

 

France

 

 

126

 

 

 

89

 

 

 

108

 

Italy

 

 

56

 

 

 

52

 

 

 

59

 

USA

 

 

1,253

 

 

 

976

 

 

 

1,157

 

Singapore

 

 

7,442

 

 

 

5,817

 

 

 

4,857

 

Japan

 

 

586

 

 

 

479

 

 

 

520

 

Other countries

 

 

16

 

 

 

11

 

 

 

13

 

Total net revenues

 

 

12,761

 

 

 

10,219

 

 

 

9,556

 

 

Property, plant and equipment, net

 

 

 

December 31,

2021

 

 

December 31,

2020

 

Netherlands

 

 

1,498

 

 

 

1,046

 

France

 

 

1,154

 

 

 

905

 

Italy

 

 

1,469

 

 

 

1,213

 

Other European countries

 

 

114

 

 

 

118

 

USA

 

 

36

 

 

 

24

 

Singapore

 

 

671

 

 

 

604

 

Malaysia

 

 

221

 

 

 

186

 

Other countries

 

 

497

 

 

 

500

 

Total property, plant and equipment, net

 

 

5,660

 

 

 

4,596