Full Description

Texas Instruments Incorporated (TI) is engaged in designing and producing semiconductors that it sells to electronics designers and manufacturers. The Company is organized in four segments: Analog, Embedded Processing, Wireless and Other. TI sells two general categories of semiconductor products: custom and standard. A custom product is designed for a specific customer for a specific application, is sold only to that customer and is typically sold directly to the customer. A standard product is designed for use by many customers and/or many applications and is generally sold through both distribution and direct channels. In May 2008, the Company acquired Commergy Technologies, Ltd., an Ireland-based power supply reference design provider that specializes in energy efficient and compact architectures. In June 2008, the Company acquired Innovative Design Solutions (IDS), which develops analog chips and integrated solutions. In May 2009, the Company announced that it will expand its microcontroller (MCU) portfolio with the acquisition of Luminary Micro, the supplier of ARM Cortex-M3-based 32-bit MCUs.

Analog

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 so the signals can be processed by other semiconductors, such as digital signal processors (DSPs). Analog semiconductors are also used to manage power distribution and consumption. Sales from Analog segment accounted for about 40 % of the Company’s revenue during the year ended December 31, 2008. High-performance analog products include standard analog semiconductors, such as amplifiers, data converters, low-power radio frequency devices, and interface and power management semiconductors (standard analog portfolio includes more than 20,000 products), that it markets to approximately 80,000 customers, who use them in a range of products across the industrial, communications, computing and consumer markets. High-performance analog products generally have long life cycles, often 10 to 20 years.

High-volume analog and logic products include two product types. The first, high-volume analog, includes products for specific applications, including custom products for specific customers. The life cycles of the Company’s high-volume analog products are generally shorter than those of its high-performance analog products. End markets for high-volume analog products include communications, automotive, computing and many consumer electronics products. The second product type, standard linear and logic, includes commodity products marketed to many different customers for many different applications.

The Company competes with Analog Devices, Inc., Freescale Semiconductor, Inc., Infineon Technologies AG, Intersil Corporation, Linear Technology Corporation, Maxim Integrated Products, Inc., National Semiconductor Corporation, NXP B.V. and STMicroelectronics NV.

Embedded Processing

Embedded Processing products include the Company’s DSPs (other than DSPs specific to its Wireless segment) and microcontrollers. DSPs perform mathematical computations almost instantaneously to process and improve digital data. Microcontrollers are microprocessors that are designed to control a set of specific tasks for electronic equipment. Sales of Embedded Processing products accounted for about 15 % of the Company’s revenue during 2008.

The Company competes with Freescale Semiconductor, Inc., Infineon Technologies AG, NEC Electronics and Renesas Technology Corp.

Wireless

The Company design, make and sell products, such as applications processor to run the phone’s software and services, and semiconductors to enable connectivity to Bluetooth devices, wireless fidelity (WiFi) networks or global positioning system (GPS) location services. Wireless portfolio includes both standard (or merchant) products and custom products. Sales of Wireless products accounted for about 25 % of its revenue during 2008. The Company OMAP product line is used by the handset manufacturers.

The Company competes with Broadcom Corp., Freescale Semiconductor, Inc., Infineon Technologies AG, Marvell Technology Group, Ltd., QUALCOMM Incorporated and STMicroelectronics NV.

Other

Other segment includes revenue from smaller semiconductor product lines and handheld graphing and scientific calculators, and from royalties received for the Company’s technology that it licenses to other electronics companies. The semiconductor products in Other segment include DLP products (primarily used to create high-definition images for business and home theater projectors, televisions and movie projectors), reduced-instruction set computing (RISC) microprocessors (designed to provide fast computing and often implemented in servers) and custom semiconductors known as application-specific integrated circuits (ASICs). This segment accounted for about 20 % of the Company’s revenue in 2008.