Description of business, including segment and geographic area information

6 Months Ended

Jun. 30, 2023

Description of business, including segment and geographic area information

We design and manufacture semiconductors that we sell to electronics designers and manufacturers all over the world. We have two reportable segments, Analog and Embedded Processing, each of which represents groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels. Our segments also reflect how management allocates resources and measures results.

•Analog semiconductors change real-world signals, such as sound, temperature, pressure or images, by conditioning them, amplifying them and often converting them to a stream of digital data that can be processed by other semiconductors, such as embedded processors. Analog semiconductors are also used to manage power in all electronic equipment by converting, distributing, storing, discharging, isolating and measuring electrical energy, whether the equipment is plugged into a wall or using a battery. Our Analog segment consists of two major product lines: Power and Signal Chain.

•Embedded Processing products are the digital “brains” of many types of electronic equipment. They are designed to handle specific tasks and can be optimized for various combinations of performance, power and cost, depending on the application.

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.

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.

Segment information


	For Three Months Ended				For Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenue:
Analog	$	3,278	$	3,992	$	6,567	$	7,808
Embedded Processing	894		821		1,726		1,603
Other	359		399		617		706
Total revenue	$	4,531	$	5,212	$	8,910	$	10,117

Operating profit:
Analog	$	1,463	$	2,226	$	3,037	$	4,376
Embedded Processing	318		324		555		639
Other (a)	191		173		314		271
Total operating profit	$	1,972	$	2,723	$	3,906	$	5,286

(a)Includes restructuring charges/other

Geographic area information

The following geographic area information is based on product shipment destination, which does not reflect end demand by geography.


	For Three Months Ended								For Six Months Ended
	June 30,								June 30,
	2023				2022				2023				2022
Revenue:
United States	$	715	16	%	$	577	11	%	$	1,270	14	%	$	1,071	11	%
China (a)	1,820		40		2,751		53		3,651		41		5,299		52
Rest of Asia	534		12		644		12		1,083		12		1,299		13
Europe, Middle East and Africa	956		21		822		16		1,942		22		1,636		16
Japan	349		8		276		5		638		7		539		5
Rest of world	157		3		142		3		326		4		273		3
Total revenue	$	4,531	100	%	$	5,212	100	%	$	8,910	100	%	$	10,117	100	%

(a)Revenue from products shipped into China 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.

The following additional geographic information includes our estimate for revenue based on the location of our end customers’ headquarters, providing a better representation of the geographic profile for where critical decisions are made.


	For Three Months Ended								For Six Months Ended
	June 30,								June 30,
	2023				2022				2023				2022
Revenue:
United States	$	1,493	33	%	$	1,706	33	%	$	2,850	32	%	$	3,276	32	%
China	872		19		1,340		26		1,748		20		2,615		26
Rest of Asia	435		10		569		11		829		9		1,109		11
Europe, Middle East and Africa (a)	1,194		26		1,120		21		2,464		28		2,199		22
Japan	480		11		414		8		918		10		806		8
Rest of world	57		1		63		1		101		1		112		1
Total revenue	$	4,531	100	%	$	5,212	100	%	$	8,910	100	%	$	10,117	100	%

(a)Revenue from end customers headquartered in Germany was 13% and 9% in the second quarters of 2023 and 2022, respectively, and 13% and 10% in the first six months of 2023 and 2022, respectively.