Description of business, including segment and geographic area information

9 Months Ended

Sep. 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 Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue:
Analog	$	3,353	$	3,993	$	9,920	$	11,801
Embedded Processing	890		821		2,616		2,424
Other	289		427		906		1,133
Total revenue	$	4,532	$	5,241	$	13,442	$	15,358

Operating profit:
Analog	$	1,504	$	2,185	$	4,541	$	6,561
Embedded Processing	258		321		813		960
Other (a)	130		172		444		443
Total operating profit	$	1,892	$	2,678	$	5,798	$	7,964

(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 Nine Months Ended
	September 30,								September 30,
	2023				2022				2023				2022
Revenue:
United States	$	630	14	%	$	694	13	%	$	1,900	14	%	$	1,765	11	%
China (a)	1,880		41		2,441		47		5,531		41		7,740		50
Rest of Asia	571		13		694		13		1,654		12		1,993		13
Europe, Middle East and Africa	952		21		942		18		2,894		22		2,578		17
Japan	338		7		310		6		976		7		849		6
Rest of world	161		4		160		3		487		4		433		3
Total revenue	$	4,532	100	%	$	5,241	100	%	$	13,442	100	%	$	15,358	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 Nine Months Ended
	September 30,								September 30,
	2023				2022				2023				2022
Revenue:
United States	$	1,541	34	%	$	1,782	34	%	$	4,391	33	%	$	5,058	33	%
China	813		18		1,143		22		2,561		19		3,758		24
Rest of Asia	434		10		534		10		1,263		10		1,643		11
Europe, Middle East and Africa (a)	1,193		26		1,281		24		3,657		27		3,480		23
Japan	455		10		446		9		1,373		10		1,252		8
Rest of world	96		2		55		1		197		1		167		1
Total revenue	$	4,532	100	%	$	5,241	100	%	$	13,442	100	%	$	15,358	100	%

(a)Revenue from end customers headquartered in Germany was 13% and 11% in the third quarters of 2023 and 2022, respectively, and 13% and 10% in the first nine months of 2023 and 2022, respectively.