Description of business, including segment and geographic area information | 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 products that have similar design and development requirements, product characteristics and manufacturing processes. Our segments reflect how our chief operating decision maker (CODM), which is our chief executive officer, 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. 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, integration and restructuring charges (see Note 11); 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. With the exception of goodwill, we do not identify or allocate assets by operating segment, nor does the CODM evaluate operating segments using discrete asset information. We have no material intersegment revenue. The accounting policies of the segments are consistent with those described in the significant accounting policies and practices. The CODM assesses the performance of our segments and decides how to allocate resources based on each segment’s revenue growth, gross margin and operating profit. The CODM utilizes these metrics by comparing budget versus actual results as well as benchmarking to our competitors. Segment information For Year Ended December 31, 2024 Analog Embedded Processing Other Total Revenue $ 12,161 $ 2,533 $ 947 $ 15,641 Cost of revenue 4,869 1,315 363 6,547 Gross profit 7,292 1,218 584 9,094 Research and development 1,411 475 73 1,959 Selling, general and administrative 1,273 391 130 1,794 Restructuring charges/other — — (124) (124) Operating profit $ 4,608 $ 352 $ 505 $ 5,465 For Year Ended December 31, 2023 Analog Embedded Processing Other Total Revenue $ 13,040 $ 3,368 $ 1,111 $ 17,519 Cost of revenue 4,615 1,493 392 6,500 Gross profit 8,425 1,875 719 11,019 Research and development 1,317 457 89 1,863 Selling, general and administrative 1,287 410 128 1,825 Restructuring charges/other — — — — Operating profit $ 5,821 $ 1,008 $ 502 $ 7,331 For Year Ended December 31, 2022 Analog Embedded Processing Other Total Revenue $ 15,359 $ 3,261 $ 1,408 $ 20,028 Cost of revenue 4,610 1,223 424 6,257 Gross profit 10,749 2,038 984 13,771 Research and development 1,178 413 79 1,670 Selling, general and administrative 1,212 372 120 1,704 Restructuring charges/other — — 257 257 Operating profit $ 8,359 $ 1,253 $ 528 $ 10,140 Geographic area information Our estimate for revenue based on the geographic location of our end customers’ headquarters, which represents where critical decisions are made, is as follows: For Years Ended December 31, 2024 2023 2022 Revenue: United States $ 5,957 38 % $ 5,814 33 % $ 6,609 33 % China 3,012 19 3,293 19 4,807 24 Rest of Asia 1,681 11 1,721 10 2,003 10 Europe, Middle East and Africa (a) 3,519 22 4,642 26 4,807 24 Japan 1,212 8 1,782 10 1,602 8 Rest of world 260 2 267 2 200 1 Total revenue $ 15,641 100 % $ 17,519 100 % $ 20,028 100 % (a) Revenue from end customers headquartered in Germany was 11%, 13% and 11% of total revenue in 2024, 2023 and 2022, respectively. Property, plant and equipment by geographic area, based on physical location: December 31, 2024 2023 Property, plant and equipment: United States $ 8,342 $ 7,548 China 737 731 Rest of Asia 1,877 1,433 Europe, Middle East and Africa 74 68 Japan 274 169 Rest of world 43 50 Total property, plant and equipment $ 11,347 $ 9,999 Major customer One of our end customers accounted for 12% of revenue in 2024 recognized primarily in our Analog segment. No end customer accounted for 10% or more of revenue in 2023 or 2022. |