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[ 42 ] TEXAS INSTRUMENTS 2008 ANNUAL REPORT
Analog
2008 2007
2008
vs. 2007 2006
2007
vs. 2006
Revenue ................................................ $4,857 $4,927 -1% $ 4,746 4%
Operating profit ........................................... 1,050 1,548 -32% 1,455 6%
Operating profit % of revenue ............................. 21.6%31.4%30.7%
Analog revenue was about even with the prior year as growth in shipments of high-performance analog products was more than offset
by a decline in shipments of high-volume analog & logic products.
Operating profit was $1.05 billion, or 21.6 percent of revenue. This was a decrease of $498 million from 2007 due to lower gross
profit, and to a lesser extent, higher operating expenses. Higher operating expenses were primarily due to continued investment in R&D
and SG&A, reflecting the strategic importance of this segment to our future growth.
Embedded Processing
2008 2007
2008
vs. 2007 2006
2007
vs. 2006
Revenue ................................................ $1,631 $1,588 3% $1,554 2%
Operating profit ........................................... 268 290 -7%253 15%
Operating profit % of revenue ............................. 16.5%18.3%16.3%
Embedded Processing revenue grew 3 percent compared with 2007 due to increased shipments during the earlier part of 2008,
although revenue declined during the fourth quarter. The increase in revenue from 2007 was due to increased shipments of products for
communications infrastructure applications, and to a lesser extent, catalog products. These increases more than offset lower revenue
from a decline in shipments of products for automotive applications.
Operating profit was $268 million, or 16.5 percent of revenue. This was a decrease of $22 million compared with 2007 due to higher
restructuring charges.
Wireless
2008 2007
2008
vs. 2007 2006
2007
vs. 2006
Revenue ................................................ $3,383 $4,195 -19% $4,308 -3%
Operating profit ........................................... 347 763 -55% 635 20%
Operating profit % of revenue ............................. 10.3%18.2%14.7%
Wireless revenue declined $812 million, or 19 percent, from 2007 primarily due to lower shipments of baseband products, and to a
lesser extent, lower shipments of OMAP application processors. As announced in December 2006, LM Ericsson Telephone Company
added a second supplier of 3G basebands for handset applications, which began to affect our results in the fourth quarter of 2007 and
continued to do so in 2008.
Operating profit was $347 million, or 10.3 percent of revenue. This was a decrease of $416 million from 2007 due to lower gross
profit, and to a lesser extent, higher restructuring costs. These decreases were partially offset by lower operating expenses.
In October 2008, we announced we were exploring the potential sale of our Wireless merchant baseband products operation.
We have since discontinued these efforts, as we concluded that a sale would not achieve the same value that we believe we will
accomplish by retaining this operation and reducing the investment levels to the minimum required to support our existing customer
engagements. See Note 2 to the Financial Statements regarding the associated costs and savings.