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| Other Financial Statement Details [Text Block] |
Accounts Receivable
We sell certain of our accounts receivable on a non-recourse basis to third-party financial institutions. We record these transactions as sales of receivables and present cash proceeds as cash flows provided by operating activities in the Consolidated Statements of Cash Flows. Accounts receivable sold under non-recourse factoring arrangements were $2.0 billion during 2023 and $665 million during 2022. After the sale of our accounts receivable, we expect to collect payment from the customers and remit it to the third-party financial institution.
Inventories
Property, Plant, and Equipment
Our depreciable property, plant, and equipment assets are depreciated over the following estimated useful lives: machinery and equipment, 3 to 8 years; and buildings, 10 to 25 years. Effective January 2023, we increased the estimated useful life of certain production machinery and equipment from 5 to 8 years. When compared to the estimated useful life in place as of the end of 2022, we estimate this change increased gross margin in 2023 by approximately $2.5 billion and decreased R&D expense by approximately $400 million. As of December 30, 2023, we estimate this change decreased ending inventory values by approximately $1.3 billion. These estimates are based on the assets in use and under construction as of the beginning of 2023 and are calculated at that point in time.
Net property, plant, and equipment by country at the end of each period was as follows:
Government Incentives
We enter into government incentive arrangements with local, regional, and national governments, both US and non-US. These arrangements vary in size, duration, and conditions and allow us to maintain a market-comparable foothold across various geographies. These incentives are primarily structured as cash grants and refundable tax credits. Capital-related incentives have terms of up to 15 years and operating-related incentives have terms that can vary widely. We are eligible to receive these incentives because we engage in qualifying capital investments, R&D, and other activities as defined by the relevant government entities. This includes qualifying capital investments for semiconductor wafer and advanced packaging manufacturing facilities construction and acquisition of equipment. Each incentive requires that we comply with certain conditions for a period that may exceed the incentive terms. These conditions can include achievement of future operational targets and committing to minimum levels of capital investment. If conditions are not satisfied, the incentives may be subject to reduction, recapture, or termination.
Capital-related incentives reduced gross property, plant, and equipment by $5.5 billion as of December 30, 2023 ($3.3 billion as of December 31, 2022), of which $2.2 billion was recognized in 2023 ($373 million in 2022). Capital-related incentives reduced depreciation expense by $226 million in 2023, of which substantially all reduced cost of sales ($230 million in 2022, all of which reduced cost of sales). Related incentives recognized during each period consisted of the following:
▪US federal government pursuant to the US CHIPS and Science Act - We recognized a non-cash refundable advanced manufacturing investment tax credit of $845 million in 2023, which is recorded as an offset to income taxes payable. No incentives were recognized in 2022.
▪US state governments - We recognized $723 million of grants in 2023 related to two new leading-edge chip factories in Ohio. No incentives were recognized in 2022.
▪Non-US governments - We recognized $645 million of grants and refundable tax credits in 2023 ($373 million in 2022), a majority of which related to the expansion of silicon wafer manufacturing facilities in Ireland.
Operating-related incentives benefited operating income by $202 million in 2023 ($104 million in 2022), a majority of which was recorded in cost of sales.
Capital-related and operating-related grants receivables totaled $559 million as of December 30, 2023 ($437 million as of December 31, 2022), a majority of which pertained to capital-related grants and were recognized as non-cash investing activities. A substantial majority of the grants receivables were recorded within on our Consolidated Balance Sheets as of December 30, 2023 and as of December 31, 2022. Capital-related refundable tax credits totaled $365 million as of December 30, 2023 (no balance as of December 31, 2022) and were recorded within income taxes payable on our Consolidated Balance Sheets.
Other Accrued Liabilities Other accrued liabilities include deferred compensation of $2.9 billion as of December 30, 2023 ($2.4 billion as of December 31, 2022)Advertising Advertising costs, including direct marketing, are expensed as incurred and recorded within MG&A expenses. Advertising costs were $950 million in 2023 ($1.2 billion in 2022 and $1.1 billion in 2021).Interest and Other, Net
Interest expense is net of $1.5 billion of interest capitalized in 2023 ($785 million in 2022 and $398 million in 2021).
Other, net includes a $1.0 billion gain recognized in 2022 from the first closing of the divestiture of our NAND memory business.
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