Description of Business, Including Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Description of business, including segment and geographic area information

1. Description of business, including segment and geographic area information

We design, make and sell semiconductors to electronics designers and manufacturers all over the world. For 2016, we have two reportable segments, which are established along major categories of products as follows:

• Analog – consisting of the following product lines: High Volume Analog & Logic, Power Management, High Performance Analog and Silicon Valley Analog.

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

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, custom ASICs and royalties received from agreements involving license rights to our patent portfolio.

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 13); restructuring charges (see Note 3); 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. The assets and liabilities associated with these organizations are included in Other.

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 the same as those described below in the summary of significant accounting policies and practices.

Segment information

	For Years Ended December 31,
	2016		2015		2014
Revenue:
Analog	$	8,536	$	8,339	$	8,104
Embedded Processing		3,023		2,787		2,740
Other		1,811		1,874		2,201
Total revenue	$	13,370	$	13,000	$	13,045
Operating profit:
Analog	$	3,380	$	3,048	$	2,786
Embedded Processing		801		596		384
Other		618		630		777
Total operating profit	$	4,799	$	4,274	$	3,947

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 revenue information is not necessarily indicative of the geographic area in which the end applications containing our products are ultimately consumed because our products tend to be shipped to the locations where our customers manufacture their products. Specifically, many of our products are shipped to our customers in China who may include these parts in the manufacture of their own end products, which they may in turn export to their customers around the world.

	For Years Ended December 31,
	2016		2015		2014
Revenue:
United States	$	1,682	$	1,612	$	1,625
Asia (a)		8,024		7,910		7,915
Europe, Middle East and Africa		2,393		2,163		2,294
Japan		1,040		1,127		1,032
Rest of world		231		188		179
Total revenue	$	13,370	$	13,000	$	13,045

(a) Revenue from products shipped into China, including Hong Kong, was $6.0 billion in 2016, $5.8 billion in 2015 and $5.7 billion in 2014.

	December 31,
	2016		2015		2014
Property, plant and equipment, net:
United States	$	1,372	$	1,370	$	1,436
Asia (a)		908		958		1,096
Europe, Middle East and Africa		98		130		162
Japan		115		122		124
Rest of world		19		16		22
Total property, plant and equipment, net	$	2,512	$	2,596	$	2,840

(a) Property, plant and equipment, net, at our two sites in the Philippines was $412 million, $471 million and $546 million as of December 31, 2016, 2015 and 2014, respectively.

Major customer

No end customer accounted for 10 percent or more of revenue in 2016 or 2014. In 2015, Apple Inc. accounted for approximately 11 percent of revenue, recognized primarily in our Analog segment.