Texas Instruments 2015 Annual Report Download - page 9

 3
FORM 10-K
SVA products
These฀include฀a฀broad฀portfolio฀of฀industrial,฀high-voltage฀power฀management,฀data฀converter,฀interface฀and฀operational฀amplifier฀
catalog฀products฀used฀in฀manufacturing฀a฀wide฀range฀of฀electronic฀systems.฀SVA฀products฀support฀applications฀like฀video฀and฀data฀
interface฀products,฀electrical฀arc/fault฀detection฀systems,฀and฀mobile฀lighting฀and฀display฀systems.฀SVA฀products฀generally฀have฀long฀life฀
cycles,฀often฀more฀than฀10฀years.฀SVA฀consists฀primarily฀of฀products฀that฀we฀acquired฀through฀our฀purchase฀of฀National฀Semiconductor฀
Corporation (National) in 2011.
Embedded Processing
Embedded฀Processing฀generated฀$2.7฀billion฀of฀revenue฀in฀2014.฀Embedded฀Processing฀products฀are฀the฀“brains”฀of฀many฀electronic฀
devices.฀Embedded฀processors฀are฀designed฀to฀handle฀specific฀tasks฀and฀can฀be฀optimized฀for฀various฀combinations฀of฀performance,฀
power฀and฀cost,฀depending฀on฀the฀application.฀The฀devices฀vary฀from฀simple,฀low-cost฀products฀used฀in฀electric฀toothbrushes฀to฀highly฀
specialized,฀complex฀devices฀used฀in฀communications฀infrastructure฀equipment.฀Our฀Embedded฀Processing฀products฀are฀used฀in฀many฀
markets, particularly industrial and automotive.
An฀important฀characteristic฀of฀our฀Embedded฀Processing฀products฀is฀that฀our฀customers฀often฀invest฀their฀own฀research฀and฀
development฀(R&D)฀to฀write฀software฀that฀operates฀on฀our฀products.฀This฀investment฀tends฀to฀increase฀the฀length฀of฀our฀customer฀
relationships฀because฀many฀customers฀prefer฀to฀re-use฀software฀from฀one฀product฀generation฀to฀the฀next.
Sales฀of฀Embedded฀Processing฀products฀generated฀21฀percent฀of฀our฀revenue฀in฀2014.฀According฀to฀external฀sources,฀the฀market฀for฀
embedded฀processors฀was฀$18฀billion฀in฀2014.฀We฀held฀the฀number฀two฀position,฀which฀represented฀15฀percent฀of฀this฀fragmented฀
market.฀We฀believe฀we฀are฀well฀positioned฀to฀increase฀our฀market฀share฀over฀time.
Our฀Embedded฀Processing฀segment฀includes฀the฀following฀major฀product฀lines:฀Processor,฀Microcontrollers฀and฀Connectivity.฀
Processor products
These include digital signal processors (DSPs) and applications processors. DSPs perform mathematical computations almost
instantaneously to process or improve digital data. Applications processors are typically tailored for a specific class of applications such
as฀communications฀infrastructure฀and฀automotive฀(infotainment฀and฀advanced฀driver฀assistance฀systems).฀They฀are฀also฀sold฀into฀broad฀
industrial applications.
Microcontroller products
These include self-contained systems with a processor core, memory and peripherals that are designed to control a set of specific tasks
for electronic equipment. Microcontrollers tend to have minimal requirements for memory and program length, with no operating system
and low software complexity. Analog components that control or interface with sensors and other systems are often integrated into
microcontrollers.
Connectivity products
These฀include฀products฀that฀enable฀electronic฀devices฀to฀seamlessly฀connect฀and฀transfer฀data,฀and฀the฀requirements฀for฀speed,฀
data฀capability,฀distance,฀power฀and฀security฀vary฀depending฀on฀the฀application.฀Our฀Connectivity฀products฀support฀many฀wireless฀
technologies฀to฀meet฀these฀requirements,฀including฀low-power฀wireless฀network฀standards฀like฀Zigbee®฀and฀other฀technologies฀
like฀Bluetooth®,฀WiFi฀and฀GPS.฀Our฀Connectivity฀products฀are฀usually฀designed฀into฀customer฀devices฀alongside฀our฀processor฀and฀
microcontroller฀products,฀enabling฀data฀to฀be฀collected,฀transmitted฀and฀acted฀upon.

Other฀generated฀$2.2฀billion฀of฀revenue฀in฀2014฀and฀includes:
•฀ Revenue from our smaller product lines, such as DLP®฀products฀(primarily฀used฀in฀projectors฀to฀create฀high-definition฀images),฀
certain custom semiconductors known as application-specific integrated circuits (ASICs) and calculators.
•฀ Revenue฀from฀our฀baseband฀products฀and฀from฀our฀OMAP™฀applications฀processors฀and฀connectivity฀products฀sold฀into฀
smartphones฀and฀consumer฀tablets.฀Our฀exit฀from฀these฀“legacy฀wireless฀products”฀was฀completed฀in฀2013.฀
•฀ Royalties received for our patented technology that we license to other electronics companies.
We also include in Other items that are not used in evaluating the results of or in allocating resources to our segments. These include
acquisition-related charges; restructuring charges; and certain corporate-level items, such as litigation expenses, environmental costs,
insurance settlements, and gains and losses from other activities, including asset dispositions.