Related Parties - Equity Joint Ventures |
9 Months Ended |
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Sep. 28, 2024 | |
| Equity Method Investments and Joint Ventures [Abstract] | |
| Related Parties - Equity Joint Ventures | Related Parties — Equity Joint Ventures ATMP Joint Ventures
The Company holds a 15% equity interest in two joint ventures (collectively, the ATMP JV) with affiliates of Tongfu Microelectronics Co., Ltd, a Chinese joint stock company. The Company has no obligation to fund the ATMP JV. The Company accounts for its equity interests in the ATMP JV under the equity method of accounting due to its significant influence over the ATMP JV.
The ATMP JV provides assembly, testing, marking and packaging (ATMP) services to the Company. The Company assists the ATMP JV in its management of certain raw material inventory. The purchases from and resales to the ATMP JV of inventory under the Company’s inventory management program are reported within purchases and resales with the ATMP JV and do not impact the Company’s condensed consolidated statements of operations.
The Company’s purchases from the ATMP JV during the three and nine months ended September 28, 2024 were $407 million and $1.2 billion, respectively. The Company’s purchases from the ATMP JV during the three and nine months ended September 30, 2023 were $448 million and $1.2 billion, respectively. As of September 28, 2024 and December 30, 2023, the amounts payable to the ATMP JV were $461 million and $363 million, respectively, and are reflected as Payables to related parties on the Company’s condensed consolidated balance sheets. The Company’s resales to the ATMP JV during the three and nine months ended September 28, 2024 were $33 million and $103 million, respectively. The Company’s resales to the ATMP JV during the three and nine months ended September 30, 2023 were $2 million and $5 million, respectively. As of September 28, 2024 and December 30, 2023, the Company’s receivables from the ATMP JV were $29 million and $9 million, respectively, and are reflected as Receivables from related parties on the Company’s balance sheet.
During the three and nine months ended September 28, 2024, the Company recorded a gain of $7 million and $21 million, in Equity income in investee on its statements of operations, respectively. During the three and nine months ended September 30, 2023, the Company recorded a gain of $3 million and $10 million, in Equity income in investee on its statements of operations, respectively.
On August 8, 2024, the Company contributed $17 million to the ATMP JV, representing additional equity that is in proportion to the Company’s existing 15% equity interest. As of September 28, 2024 and December 30, 2023, the carrying value of the Company’s investment in the ATMP JV was $137 million and $99 million, respectively.
THATIC Joint Ventures
The Company holds equity interests in two joint ventures (collectively, the THATIC JV) with Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity. As of both September 28, 2024 and December 30, 2023, the carrying value of the investment was zero. The Company licenses certain of its intellectual property (Licensed IP) to the THATIC JV and receives royalties based on sales of the THATIC JV’s products, which is recorded within operating income as licensing gain. During the three and nine months ended September 28, 2024, the Company recognized $14 million and $37 million of licensing gain from royalties associated with Licensed IP, respectively. During the three and nine months ended September 30, 2023, the Company recognized $10 million and $28 million of licensing gain from royalties associated with Licensed IP, respectively. As of September 28, 2024 and December 30, 2023, the Company had no receivables from the THATIC JV. In June 2019, the Bureau of Industry and Security of the United States Department of Commerce added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. The Company is complying with U.S. law pertaining to the Entity List designation.
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