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FORM 10-K
P ART I
ITEM 1. Business.
Wedesignandmakesemiconductorsthatweselltoelectronicsdesignersandmanufacturersallovertheworld.Webeganoperations
in 1930. We are incorporated in Delaware, headquartered in Dallas, Texas, and have design, manufacturing or sales operations in
35countries.Wehavetworeportablesegments:AnalogandEmbeddedProcessing.Wereporttheresultsofourremainingbusiness
activitiesinOther.WeexpectAnalogandEmbeddedProcessingtobeourprimarygrowthenginesintheyearsahead,andwetherefore
focusourresourcesonthesesegments.In2014,wegenerated$13.05billionofrevenue.
Product information
Semiconductorsareelectroniccomponentsthatserveasthebuildingblocksinsidemodernelectronicsystemsandequipment.
Semiconductors,generallyknownas“chips,”combinemultipletransistorsonasinglepieceofmaterialtoformacompleteelectronic
circuit. We have tens of thousands of products that are used to accomplish many different things, such as converting and amplifying
signals,interfacingwithotherdevices,managinganddistributingpower,processingdata,cancelingnoiseandimprovingsignal
resolution.Thisbroadportfolioincludesproductsthatareintegraltoalmostallelectronicequipment.
Wesellcatalogandapplication-specificstandardsemiconductorproducts,bothofwhichwemarkettomultiplecustomers.Catalog
productsaredesignedforusebymanycustomersand/ormanyapplicationsandaresoldthroughbothdistributionanddirectchannels.
The life cycles of catalog products generally span multiple years, with some products continuing to sell for decades after their initial
release.Application-specificstandardproducts(ASSPs)aredesignedforusebyasmallernumberofcustomersandaretargetedtoa
specificapplication.ThelifecyclesofASSPsaregenerallydeterminedbyend-equipmentupgradecyclesandcanbeasshortas12to
24months,althoughsomecanbeusedacrossmultiplegenerationsofcustomers’products.Thevastmajorityofourrevenueisderived
from products that are differentiated from competitors’ products.
Oursegmentsrepresentgroupsofsimilarproductsthatarecombinedonthebasisofsimilardesignanddevelopmentrequirements,
productcharacteristics,manufacturingprocessesanddistributionchannels.Oursegmentsalsoreflecthowmanagementallocates
resources and measures results. Additional information regarding each segment follows.
Analog
Analoggenerated$8.1billionofrevenuein2014.Analogsemiconductorschangereal-worldsignals,suchassound,temperature,pressure
orimages,byconditioningthem,amplifyingthemandoftenconvertingthemtoastreamofdigitaldatathatcanbeprocessedbyother
semiconductors,suchasembeddedprocessors.Analogsemiconductorsalsoareusedtomanagepowerineveryelectronicdevice,whether
pluggedintoawallorrunningoffabattery.OurAnalogproductsareusedinmanymarkets,particularlypersonalelectronicsandindustrial.
Sales of our Analog products generated 62 percent of our revenue in 2014. According to external sources, the market for analog
semiconductorswas$44billionin2014.OurAnalogsegment’srevenuein2014was18percentofthisfragmentedmarket,theleading
position.Webelievewearewellpositionedtoincreaseourmarketshareovertime.
OurAnalogsegmentincludesthefollowingproductlines:HighVolumeAnalog&Logic(HVAL),PowerManagement(Power),High
PerformanceAnalog(HPA)andSiliconValleyAnalog(SVA).
HVAL products
Theseincludehigh-volumeintegratedanalogproductsforspecificapplicationsandhigh-volumecatalogproducts.HVALproducts
support applications like automotive safety devices, touchscreen controllers, low-voltage motor drivers and integrated motor controllers.
Power products
TheseincludebothcatalogproductsandASSPsthathelpcustomersmanagepowerinelectronicsystems.OurbroadportfolioofPower
productsisdesignedtoenhancetheefficiencyofpowereddevicesusingbatterymanagementsolutions,portablepowerconversion
devices, power supply controls and point-of-load products.
HPA products
These include catalog analog products that we market to many different customers who use them in manufacturing a wide range of products.
HPAproductsincludehigh-speeddataconverters,amplifiers,sensors,highreliabilityproducts,interfaceproductsandprecisionanalogproducts
that are typically used in systems that require high performance. HPA products generally have long life cycles, often more than 10 years.