Description of Business, Including Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2019

Description of business, including segment and geographic area information

We design, make and sell semiconductors to electronics designers and manufacturers all over the world. We have two reportable segments, which are established along major categories of products as follows:

•Analog – consisting of the following product lines: Power, Signal Chain and High Volume.

•Embedded Processing – consisting of the following product lines: Connected Microcontrollers and Processors.

We report the results of our remaining business activities in Other. Other includes operating segments that do not meet the quantitative thresholds for individually reportable segments and cannot be aggregated with other operating segments. Other includes DLP^® products, calculators and custom ASIC products.

In Other, we also include items that are not used in evaluating the results of or in allocating resources to our segments. Examples of these items include acquisition charges (see Note 7); restructuring charges (see Note 12); and certain corporate-level items, such as litigation expenses, environmental costs, insurance settlements, and gains and losses from other activities, including asset dispositions. We allocate the remainder of our expenses associated with corporate activities to our operating segments based on specific methodologies, such as percentage of operating expenses or headcount.

Our centralized manufacturing and support organizations, such as facilities, procurement and logistics, provide support to our operating segments, including those in Other. Costs incurred by these organizations, including depreciation, are charged to the segments on a per-unit basis. Consequently, depreciation expense is not an independently identifiable component within the segments’ results and therefore is not provided.

With the exception of goodwill, we do not identify or allocate assets by operating segment, nor does the chief operating decision maker evaluate operating segments using discrete asset information. We have no material intersegment revenue. The accounting policies of the segments are consistent with those described below in the summary of significant accounting policies and practices.

Segment information


	For Years Ended December 31,
	2019		2018		2017
Revenue:
Analog	$	10,223	$	10,801	$	9,900
Embedded Processing	2,943		3,554		3,498
Other	1,217		1,429		1,563
Total revenue	$	14,383	$	15,784	$	14,961

Operating profit:
Analog	$	4,477	$	5,109	$	4,468
Embedded Processing	907		1,205		1,143
Other	339		399		472
Total operating profit	$	5,723	$	6,713	$	6,083

Geographic area information

The following geographic area information includes revenue, based on product shipment destination, and property, plant and equipment, based on physical location. The geographic revenue information does not necessarily reflect end demand by geography because our products tend to be shipped to the locations where our customers manufacture their products.


	For Years Ended December 31,
	2019		2018		2017
Revenue:
United States	$	1,827	$	2,288	$	1,901
Asia (a)	8,650		9,240		8,824
Europe, Middle East and Africa	2,707		3,047		2,907
Japan	796		869		1,049
Rest of world	403		340		280
Total revenue	$	14,383	$	15,784	$	14,961

(a)Revenue from products shipped into China was $7.2 billion, $7.0 billion and $6.6 billion in 2019, 2018 and 2017, respectively, which includes shipments to customers that manufacture in China and then export end products to their customers around the world, as well as distributors that transship inventory through China to service other countries.


	December 31,
	2019		2018
Property, plant and equipment:
United States	$	1,998	$	1,812
Asia (a)	1,046		1,116
Europe, Middle East and Africa	63		84
Japan	185		157
Rest of world	11		14
Total property, plant and equipment	$	3,303	$	3,183

(a)Property, plant and equipment at our two sites in the Philippines was $394 million and $437 million as of December 31, 2019 and 2018, respectively. Property, plant and equipment at our sites in China was $304 million and $313 million as of December 31, 2019 and 2018, respectively.