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GOODWILL AND PURCHASED INTANGIBLE ASSETS
 9 Months Ended
Mar. 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 the current and prior quarters’ business combinations. We have four reportable segments and six 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 nine months ended March 31, 2022(1):
(In thousands)Wafer Inspection and Patterning
Global Service and Support (“GSS”)
Specialty Semiconductor ProcessPCB and DisplayComponent InspectionTotal
Balance as of June 30, 2021$416,860 $25,908 $681,858 $872,971 $13,575 $2,011,172 
Acquired goodwill303,324 — — — — 303,324 
Foreign currency adjustments(25)— — — — (25)
Balance as of March 31, 2022$720,159 $25,908 $681,858 $872,971 $13,575 $2,314,471 
_________________
(1)No goodwill was assigned to the Other reporting unit and, accordingly, it was excluded from the table above.
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. In testing goodwill for impairment, we utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. When performing the qualitative assessment, we consider the following factors: stock price or market capitalization, changes in the industry and competitive environment, budget-to-actual revenue and profitability performance from the prior year and projected revenue and profitability trends for future years at our reporting units. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a quantitative assessment by comparing the carrying value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the carrying value, the amount of impairment is computed as the excess of the carrying value over the estimated fair value, not to exceed the carrying value of goodwill. Any impairment charges could have a material adverse effect on our operating results and net asset value in the quarter in which we recognize the impairment charge.
We performed the required annual goodwill impairment testing for all reporting units as of February 28, 2022, and concluded that goodwill was not impaired. As a result of our qualitative assessment, we determined that it was not necessary to perform the quantitative assessment at this time. The next annual goodwill impairment assessment 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 March 31, 2022As 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
$1,521,291 $623,834 $897,457 $1,382,612 $499,219 $883,393 
Customer relationships
4-9
365,717 157,608 208,109 305,817 131,386 174,431 
Trade name / Trademark
4-7
121,083 64,400 56,683 117,383 53,493 63,890 
Order backlog and other
<1-9
87,836 52,807 35,029 50,403 49,962 441 
Intangible assets subject to amortization2,095,927 898,649 1,197,278 1,856,215 734,060 1,122,155 
In-process research and development64,456 6,062 58,394 63,256 100 63,156 
Total$2,160,383 $904,711 $1,255,672 $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. The impairment indicator primarily includes the declines in our operating cash flows from the use of these assets. If the 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 March 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 March 31,Nine Months Ended March 31,
(In thousands)2022202120222021
Amortization expense - Costs of revenues$42,586 $40,309 $124,834 $116,087 
Amortization expense - SG&A15,102 12,063 39,880 37,793 
Amortization expense - Research and development31 32 93 94 
Total $57,719 $52,404 $164,807 $153,974 
Based on the purchased intangible assets gross carrying amount recorded as of March 31, 2022, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30:Amortization (In thousands)
2022 (remaining three months)$65,342 
2023259,649 
2024237,210 
2025220,908 
2026204,894 
2027 and thereafter209,275 
Total$1,197,278