Operating Segment, Geographic and Significant Customer Information

12 Months Ended

Dec. 31, 2019

Operating Segment, Geographic and Significant Customer Information

T. OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

Teradyne has four reportable segments (Semiconductor Test, Industrial Automation

System Test

and Wireless Test). Each of the Semiconductor Test, System Test, and Wireless Test segments is also an individual

operating segment. The Industrial Automation reportable segment consists of operating segments with discrete financial information, which have been combined into one reportable segment as they share similar economic characteristics, types of products, production processes, distribution channels, and currency risks. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The System Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace instrumentation test, storage test and circuit-board test. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robotic arms, autonomous mobile robots and advanced robotic control software. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services.

Teradyne evaluates performance based on several factors, of which the primary financial measure is business segment income (loss) before income taxes. The accounting policies of the business segments are the same as those described in Note B: “Accounting Policies.”

Segment information for the years ended December 31, 2019, 2018, and 2017 is as follows:


	Semiconductor Test		Industrial Automation			System Test		Wireless Test		Corporate And Other			Consolidated
	(in thousands)
2019
Revenues	$	1,552,571	$	298,139		$	287,455	$	157,315	$	(515	)	$	2,294,965
Income (loss) before taxes (1)(2)		416,973		(5,916	)		93,543		35,585		(14,413	)		525,772
Total assets (3)		784,808		671,559			131,428		97,299		1,101,920			2,787,014
Property additions		112,145		9,076			3,059		10,362		—			134,642
Depreciation and amortization expense		59,197		40,904			5,518		5,365		9,671			120,655
2018
Revenues	$	1,492,417	$	261,452		$	216,132	$	132,006	$	(1,205	)	$	2,100,802
Income (loss) before taxes (1)(2)		397,645		7,670			48,857		29,052		(15,423	)		467,801
Total assets (3)		669,452		607,502			88,098		77,570		1,263,984			2,706,606
Property additions		94,496		11,188			3,469		5,226		—			114,379
Depreciation and amortization expense		58,095		36,755			6,430		5,328		6,616			113,224
2017
Revenues	$	1,662,549	$	170,056		$	192,135	$	111,866	$	—		$	2,136,606
Income (loss) before taxes (1)(2)		491,361		8,763			10,305		17,350		(3,368	)		524,411
Total assets (3)		597,480		368,037			97,018		59,912		1,987,098			3,109,545
Property additions		87,920		7,044			5,976		4,435		—			105,375
Depreciation and amortization expense		58,901		25,711			6,646		5,392		11,425			108,075

(1)

Included in Corporate and Other are: contingent consideration adjustments,

investment impairment

pension and postretirement plans actuarial gains (losses), severance charges

property

insurance

recovery

related to the Japan earthquake, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations and acquisition related charges.

(2)	Included in income (loss) before taxes are charges and credits related to restructuring and other, and inventory charges.

(3)	Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

Included in each segment are charges and credits in the following line items in the statements of operation


	For the Year Ended December 31,
	2019			2018			2017
	(in thousands)
Semiconductor Test:
Cost of revenues—inventory charge	$	8,731		$	6,822		$	4,606
Restructuring and other—employee severance		1,277			8,429			1,779
Restructuring and other—impairment of fixed assets		—			—			1,124
Industrial Automation:
Restructuring and other—employee severance	$	796		$	—		$	1,414
Restructuring and other—acquisition related expenses and compensation		741			1,163			—
Cost of revenues—inventory charge		508			680			—
System Test:
Cost of revenues—inventory charge	$	2,000		$	1,175		$	1,918
Wireless:
Cost of revenues—inventory charge	$	4,005		$	2,565		$	2,190
Restructuring and other—lease impairment		—			—			972
Corporate and Other:
Restructuring and other—MiR contingent consideration adjustment	$	(22,199	)	$	17,666		$	—
Other (income) expense, net—investment impairment charge		15,000			—			—
Restructuring and other—AutoGuide contingent consideration adjustment		2,976			—			—
Selling and administrative—equity modification charge		2,108			—			—
Restructuring and other—acquisition related expenses and compensation		1,765			3,422			—
Restructuring and other—Universal Robots contingent consideration adjustment		—			(16,679	)		7,820
Restructuring and other—property insurance recovery related to Japan earthquake		—			—			(5,064	)

Information as to Teradyne’s revenues by country is as follows:


	2019		2018		2017
	(in thousands)
Revenues from customers (1):
China	$	514,327	$	348,942	$	260,451
Taiwan		485,681		516,322		687,031
United States		333,059		282,869		252,516
Korea		239,504		163,224		206,819
Europe		219,015		223,207		163,715
Japan		175,322		158,281		169,093
Thailand		87,503		59,184		29,566
Singapore		84,111		108,618		101,085
Malaysia		58,200		122,797		124,048
Philippines		54,560		77,996		105,850
Rest of the World		43,683		39,362		36,432

	$	2,294,965	$	2,100,802	$	2,136,606

(1)	Revenues attributable to a country are based on location of customer site.

In 2019 and 2018, no single

direct

customer accounted for more than 10% of

Teradyne’

consolidated revenues. In 2017, revenues from Taiwan Semiconductor Manufacturing Company Ltd. accounted for 13% of

its

consolidated

revenues

. Taiwan Semiconductor Manufacturing Company Ltd. is a customer of

Teradyne’s Semiconductor Test segment. Teradyne estimates consolidated revenues driven by Huawei Technologies Co.

Ltd. (“Huawei”), combining direct sales to that customer with sales to the customer’s OSATs

accounted for approximately 11% and 4%

its

consolidated revenues in 2019 and 2018, respectively. Teradyne estimates consolidated revenues driven by another OEM customer, combining direct sales to that customer with sales to the customer’s OSATs (which include Taiwan Semiconductor Manufacturing Company Ltd.), accounted for approximately

% and

% of

its

consolidated revenues in 2019, 2018 and 2017, respectively.

Long-lived assets by geographic area:


	United States		Foreign(1)		Total
	(in thousands)
December 31, 2019	$	252,812	$	124,943	$	377,755
December 31, 2018	$	209,368	$	70,453	$	279,821

(1)	As of December 31, 2019 and 2018, long-lived assets attributable to Singapore were $35.2 million and $19.4 million, respectively.