Company and Industry Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Company and Industry Information

COMPANY AND INDUSTRY INFORMATION

Nature of Operations

Ultratech, Inc. develops, manufactures and markets photolithography, laser thermal processing and inspection equipment for manufacturers of integrated circuits and nanotechnology components located throughout North America, Europe, Singapore, Japan, Taiwan, Korea and the rest of Asia.

We supply step-and-repeat photolithography systems based on one-to-one imaging technology. Within the integrated circuit industry, we target the market for advanced packaging applications. Within the nanotechnology industry, our target markets include laser diodes, high-brightness light emitting diodes (“HBLEDs”), Micro-Electro-Mechanical Systems (“MEMS”) and atomic layer deposition (“ALD”). Our laser thermal processing equipment is targeted at advanced annealing applications within the semiconductor industry.

Major Customers

In 2016, Taiwan Semiconductor Manufacturing Co. Ltd. (“TSMC”), United Microelectronics Corporation, Powertech Technology, Inc. and Semiconductor Manufacturing North China (Beijing) Corporation (“SMNC”) accounted for 30%, 13%, 13% and 11% of our total systems sales, respectively. In 2015, Siliconware Precision Industries Co. Ltd. (“SPIL”), TSMC and Intel Corporation (“Intel”) accounted for 21%, 13% and 10% of our total system sales, respectively. In 2014, Intel, Samsung and Global Foundries Incorporated (“GFI”) accounted for 18%, 14% and 13% of our total system sales, respectively.

At December 31, 2016, TSMC, Powertech Technology, Inc., Flash Forward, Ltd., SMNC and United Microelectronics Corporation accounted for 22%, 19%, 12%, 11% and 11% of our accounts receivable, respectively. At December 31, 2015, TSMC and Flash Forward, Ltd. accounted for 36% and 19% of our accounts receivable, respectively.

Business Segments

In evaluating our business, we give consideration to the Chief Executive Officer’s review of financial information and the organizational structure of our management. Based on this review, we concluded that, at the present time, resources are allocated and other financial decisions are made based on consolidated financial information. Accordingly, we have determined that we operate in one business segment, which is the manufacture and distribution of capital equipment to manufacturers of integrated circuits and nanotechnology components.

Enterprise-Wide Disclosures

Our products are manufactured in the United States and Singapore, and are sold worldwide. We market our products internationally through domestic and foreign-based sales and service offices. The following table presents enterprise-wide sales to external customers and long-lived assets by geographic region:

In thousands	2016		2015		2014
Net sales:
United States	$	24,871	$	28,297	$	47,629
International:
Greater China	120,690		67,927		45,227
Rest of the world	17,730		19,365		9,208
Europe	14,578		15,639		17,688
Japan	9,577		13,528		5,036
Korea	6,605		4,420		25,752
Subtotal	169,180		120,879		102,911
Total	$	194,051	$	149,176	$	150,540
Long-lived assets:
United States	$	30,760	$	34,124	$	39,577
Singapore	3,836		5,049		5,367
Rest of the world	702		756		994
Total	$	35,298	$	39,929	$	45,938

The rest of the world is comprised of sales to customers and long-lived assets in countries that are individually insignificant.

With the exception of Japan, our operations in foreign countries are not currently subject to significant currency exchange rate fluctuations, principally because sales contracts for our systems are generally denominated in U.S. dollars. In Japan, we sell our products in both U.S. dollars and Japanese yen. However, we attempt to mitigate our currency exchange rate exposure through the use of currency forward contracts. (See “Derivative Instruments and Hedging” in Note 4.)