INVENTORIES

9 Months Ended

Jul. 30, 2022

As of the dates indicated, inventories are comprised of the following (in thousands):


	July 30, 2022		October 30, 2021
Raw materials	$	621,849	$	175,399
Work-in-process	19,462		10,260
Finished goods	187,008		180,800
Deferred cost of goods sold	33,800		44,765
Gross inventories	862,119		411,224
Reserve for inventory excess and obsolescence	(35,446)		(36,959)
Inventories, net	$	826,673	$	374,265

Ciena has been expanding its manufacturing capacity and accumulating raw materials inventory of components that are available, in some cases with expanded lead times, in an effort to prepare Ciena to produce finished goods more quickly when supply constraints ease for certain common components, including integrated circuit components, for which delivery continues to be delayed. The increase in raw materials inventory is related to these steps to mitigate the impact of current supply chain constraints and the global market shortage of semiconductor parts. Ciena writes down its inventory for estimated obsolescence

or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand, which are affected by changes in Ciena’s strategic direction, discontinuance of a product or introduction of newer versions of products, declines in the sales of or forecasted demand for certain products, and general market conditions. During the first nine months of fiscal 2022, Ciena recorded a provision for inventory excess and obsolescence of $12.0 million, primarily related to a decrease in the forecasted demand for certain Networking Platforms products. Deductions from the provision for excess and obsolete inventory relate primarily to the sale of previously reserved items and disposal activities.