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What changed in Texas Instruments's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Texas Instruments's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+91 added−105 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-02)

Top changes in Texas Instruments's 2024 10-K

91 paragraphs added · 105 removed · 87 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe do not consider our business materially dependent upon any one patent or patent license. 7 Information about our executive officers The following is an alphabetical list of the names and ages of the executive officers of the company and the positions or offices with the company held by each person named: Name Age Position Ahmad S.
Biggest changeWe do not consider our business materially dependent upon any one patent or patent license. 7 Information about our executive officers The following is an alphabetical list of the names and ages of the executive officers of the company and the positions or offices with the company held by each person named: Name Age Position Ahmad Bahai 62 Senior Vice President Mark Gary 50 Senior Vice President Haviv Ilan 56 Director, President and Chief Executive Officer Katie Kane 40 Senior Vice President, Secretary and General Counsel Hagop Kozanian 42 Senior Vice President Shanon Leonard 49 Senior Vice President Rafael Lizardi 52 Senior Vice President and Chief Financial Officer Mark Roberts 49 Senior Vice President Amichai Ron 47 Senior Vice President Richard Templeton 66 Director and Chairman of the Board Christine Witzsche 40 Senior Vice President Mohammad Yunus 47 Senior Vice President The term of office of these officers is from the date of their election until their successor shall have been elected and qualified.
Each device on the wafer is packaged and tested. The entire process takes place in highly specialized facilities that require substantial investments. We own and operate semiconductor manufacturing facilities in North America, Asia, Japan and Europe. These include both wafer fabrication and assembly/test facilities. 6 We invest in manufacturing technologies and do most of our manufacturing in-house.
Each device on the wafer is packaged and tested. The entire process takes place in highly specialized facilities that require substantial investments. We own and operate semiconductor manufacturing facilities in North America, Asia, Japan and Europe. These include both wafer fabrication and assembly/test facilities. We invest in manufacturing technologies and do most of our manufacturing in-house.
Available on our website at www.ti.com/corporategovernance: (i) our Corporate Governance Guidelines; (ii) charters for the Audit, Compensation, and Governance and Stockholder Relations Committees of our board of directors; (iii) our code of conduct; and (iv) our Code of Ethics for TI Chief Executive Officer and Senior Finance Officers.
Available on our website at www.ti.com/corporategovernance: (i) our corporate governance guidelines; (ii) charters for the audit, compensation, and governance and stockholder relations committees of our board of directors; (iii) our code of conduct; and (iv) our code of ethics for TI’s chief executive officer and senior finance officers.
Examples of these items include acquisition, integration and restructuring charges, as well as certain corporate-level items, such as litigation expenses, environmental costs and gains and losses from other activities, including asset dispositions. 4 Markets for our products The table below lists the major markets for our products in 2023 and the estimated percentage of our 2023 revenue that the market represented.
Examples of these items include acquisition, integration and restructuring charges, as well as certain corporate-level items, such as litigation expenses, environmental costs and gains and losses from other activities, including asset dispositions. 4 Markets for our products The table below lists the major markets for our products in 2024 and the estimated percentage of our 2024 revenue that the market represented.
We have a diverse product portfolio that is used to accomplish many different things, such as converting and amplifying signals, interfacing with other devices, managing and distributing power, processing data, canceling noise and improving signal resolution. This broad portfolio includes approximately 80,000 products that are integral to almost every type of electronic equipment.
We have a diverse product portfolio that is used to accomplish many different things, such as converting and amplifying signals, interfacing with other devices, managing and distributing power, processing data, canceling noise and improving signal resolution. This broad portfolio includes more than 80,000 products that are integral to almost every type of electronic equipment.
Progress and investments include: • Ramping production in 300mm wafer fabrication facility RFAB2 in Richardson, Texas. • Ramping production in 300mm wafer fabrication facility LFAB1 in Lehi, Utah. • Continuing construction on SM1 and SM2 in Sherman, Texas, where we are building four 300mm wafer fabrication facilities. • Starting construction on LFAB2, another 300mm wafer fabrication facility in Lehi, Utah.
Progress and investments include: 6 • Ramping production in 300mm wafer fabrication facilities RFAB2 in Richardson, Texas, and LFAB1 in Lehi, Utah. • Equipping SM1 and continuing construction on SM2 in Sherman, Texas, where we are building four 300mm wafer fabrication facilities. • Continuing construction on LFAB2, another 300mm wafer fabrication facility in Lehi, Utah.
Our broad portfolio is designed to manage power requirements across different voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated DC/DC switching regulators, power switches, linear and low-dropout regulators, voltage references and lighting products.
Our broad portfolio is designed to manage power requirements across different voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated DC/DC switching regulators, power switches, linear and low-dropout regulators, voltage references, multiphase controllers and power stages, and lighting products.
The largest allocation over this period was to drive organic growth, which includes investments in R&D, sales and marketing, capital expenditures and working capital for inventory. In this period, we allocated just over $15 billion to capital expenditures.
The largest allocation over this period was to drive organic growth, which includes investments in R&D, sales and marketing, capital expenditures and working capital for inventory. In this period, we allocated about $20 billion to capital expenditures.
Signal Chain Signal Chain includes products that sense, condition and measure real-world signals to allow information to be transferred or converted for further processing and control. Our Signal Chain products include amplifiers, data converters, interface products, motor drives, clocks, logic and sensing products. Embedded Processing Our Embedded Processing segment generated $3.37 billion of revenue in 2023.
Signal Chain Signal Chain includes products that sense, condition and measure real-world signals to allow information to be transferred or converted for further processing and control. Our Signal Chain products include amplifiers, data converters, interface products, motor drives, clocks, logic and sensing products. Embedded Processing Our Embedded Processing segment generated $2.53 billion of revenue in 2024.
Our two reportable segments are Analog and Embedded Processing, and we report the results of our remaining business activities in Other. In 2023, we generated $17.52 billion of revenue. For decades, we have operated with a passion to create a better world by making electronics more affordable through semiconductors.
Our two reportable segments are Analog and Embedded Processing, and we report the results of our remaining business activities in Other. In 2024, we generated $15.64 billion of revenue. For decades, we have operated with a passion to create a better world by making electronics more affordable through semiconductors.
Together, these investments are designed to strengthen our manufacturing and technology competitive advantage, provide us with lower costs and greater control of our supply chain, and support growth over the next 10 to 15 years. We assess and are careful to address potential health, safety, and environmental risks presented by our operations, including our manufacturing operations.
Together, these investments are designed to strengthen our manufacturing and technology competitive advantage, provide us with lower costs and greater control of our supply chain, and support growth in the years ahead. We assess and are careful to address potential health, safety and environmental risks presented by our operations, including our manufacturing operations.
Sales of our Analog products generated about 74% of our revenue in 2023. Our Analog segment includes the following major product lines: Power and Signal Chain. Power Power includes products that help customers manage power in electronic systems.
Sales of our Analog products generated about 78% of our revenue in 2024. Our Analog segment includes the following major product lines: Power and Signal Chain. Power Power includes products that help customers manage power in electronic systems.
Historically, our sequential revenue growth rate tends to be weaker in the first and fourth quarters when compared with the second and third quarters. Customers, sales and distribution We sell our products to over 100,000 customers. Our customer base is diverse, with more than 40% of our revenue derived from customers outside our largest 100.
Historically, our sequential revenue growth rate tends to be weaker in the first and fourth quarters when compared with the second and third quarters. Customers, sales and distribution We sell our products to over 100,000 customers. Our customer base is diverse, with about half of our revenue derived from customers outside of our largest 50.
Other generated $1.11 billion of revenue in 2023 and includes revenue from DLP ® products (primarily used to project high-definition images), calculators and certain custom semiconductors known as application-specific integrated circuits (ASICs). In Other, we also include items that are not used in evaluating the results of or in allocating resources to our segments.
Other generated $947 million of revenue in 2024 and includes revenue from DLP ® products (primarily used to project high-definition images), calculators and certain custom semiconductors known as application-specific integrated circuits (ASICs). In Other, we also include items that are not used in evaluating the results of or in allocating resources to our segments.
Market Sector Industrial Factory automation & control (40% of TI revenue) Grid infrastructure Medical Aerospace & defense Test & measurement Building automation Motor drives Power delivery Appliances Pro audio, video & signage Industrial transport Retail automation & payment Lighting Automotive Infotainment & cluster (34% of TI revenue) Hybrid, electric & powertrain systems Advanced driver assistance systems (ADAS) Body electronics & lighting Passive safety Personal electronics Mobile phones (15% of TI revenue) PC & notebooks Portable electronics TV Connected peripherals & printers Tablets Home theater & entertainment Gaming Wearables (non-medical) Data storage Communications equipment Wireless infrastructure (5% of TI revenue) Wired networking Broadband fixed line access Datacom module Enterprise systems Data center & enterprise computing (4% of TI revenue) Enterprise projectors Enterprise machine Other (calculators and other) (2% of TI revenue) Market characteristics Competitive landscape Despite consolidation, the analog and embedded processing markets remain highly fragmented.
Market Sector Industrial Industrial automation (34% of TI revenue) Aerospace & defense Medical & healthcare Energy infrastructure Building automation Other industrial equipment Test & measurement Appliances Power delivery Robotics Automotive Infotainment & cluster (35% of TI revenue) Advanced driver assistance systems (ADAS) Hybrid, electric & powertrain systems Body electronics & lighting Passive safety Personal electronics Mobile phones (20% of TI revenue) PC & notebooks Portable electronics Tablets Connected peripherals & printers Home theater & entertainment TV Wearables (non-medical) Gaming Data storage Enterprise systems Data center & enterprise computing (5% of TI revenue) Enterprise projectors Enterprise machine Communications equipment Wireless infrastructure (4% of TI revenue) Wired networking Broadband fixed line access Datacom module Other (calculators and other) (2% of TI revenue) Market characteristics Competitive landscape Despite consolidation, the analog and embedded processing markets remain highly fragmented.
This spans how we select R&D projects, develop new capabilities like TI.com, invest in new manufacturing capacity or how we think about acquisitions and returning cash to our owners. Over a 10-year period from 2014 to 2023, we allocated $94 billion, which reinforces the importance of discipline in capital allocation.
This spans how we select R&D projects, develop new capabilities, invest in manufacturing capacity or how we think about acquisitions and returning cash to our owners. Over a 10-year period from 2015 to 2024, we allocated $101 billion, which reinforces the importance of discipline in capital allocation.
We market and sell our products through direct sales channels, including our website and broad sales and marketing team, and, to a lesser extent, through distributors. Over the past several years, we have been investing in new capabilities to build closer direct customer relationships.
We market and sell our products through direct sales channels, including our website and broad sales and marketing team, and, to a lesser extent, through distributors. Over the past several years, we have been investing in new capabilities to build closer direct customer relationships. In 2024, about 80% of our revenue was direct, which includes TI.com.
This investment tends to increase the length of our customer relationships because many customers prefer to reuse software from one product generation to the next. 3 Sales of Embedded Processing products generated about 19% of our revenue in 2023. Our Embedded Processing segment includes microcontrollers, digital signal processors (DSPs) and applications processors.
This investment tends to increase the length of our customer relationships because many customers prefer to reuse software from one product generation to the next. 3 Sales of Embedded Processing products generated about 16% of our revenue in 2024. Our Embedded Processing segment includes microcontrollers, processors, wireless connectivity and radar products.
We were pioneers in the transition from vacuum tubes to transistors and then to integrated circuits. As each generation has become more reliable, more affordable and lower in power, semiconductors are used by a growing number of customers and markets.
We were pioneers in the transition from vacuum tubes to transistors and then to integrated circuits. As each generation has become more reliable, more affordable and lower in power, semiconductors are used by a growing number of customers and markets. Our passion continues to be alive today as we help our customers develop electronics and new applications.
Trochu have served as executive officers of the company for more than five years. Mr. Ron became an executive officer in 2019. Mr. Gary became an executive officer in 2020. Mr. Roberts and Ms. Witzsche became executive officers in 2021. Mr. Leonard became an executive officer in 2022. Mr. Yunus became an executive officer in 2024.
All have been employees of the company for more than five years. Messrs. Bahai, Ilan, Kozanian, Lizardi, Ron and Templeton have served as executive officers of the company for more than five years. Mr. Gary became an executive officer in 2020. Mr. Roberts and Ms. Witzsche became executive officers in 2021. Mr. Leonard became an executive officer in 2022. Ms.
Our segments represent groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels. Our segments also reflect how management allocates resources and measures results. Analog Our Analog segment generated $13.04 billion of revenue in 2023.
Our segments represent groups of products that have similar design and development requirements, product characteristics and manufacturing processes. Our segments also reflect how management allocates resources and measures results. Analog Our Analog segment generated $12.16 billion of revenue in 2024.
In 2023, we sourced about 80% of our total wafers and about 65% of our assembly/test production internally. With our planned capacity expansions, we expect these percentages to increase. To supplement our internal manufacturing capacity, we selectively use the capacity of outside suppliers, commonly known as foundries and subcontractors.
In 2024, we sourced the majority of our wafer fabrication, as well as assembly and test, internally. With our planned capacity expansions, we expect our internal sourcing to continue to increase. To supplement our internal manufacturing capacity, we selectively use the capacity of outside suppliers, commonly known as foundries and subcontractors.
Human capital management At December 31, 2023, we had about 34,000 employees worldwide. Of those, about 90% were in R&D, sales or manufacturing. Our objective for human capital management is to recruit, develop and retain the best talent possible. As a technology and manufacturing company, our success is grounded in having strong engineering talent and a reliable factory workforce.
Kane and Mr. Yunus became executive officers in 2024. Human capital management At December 31, 2024, we had about 34,000 employees worldwide. Of those, about 90% were in R&D, sales or manufacturing. Our objective for human capital management is to recruit, develop and retain the best talent possible.
Technology is the foundation of our company, but ultimately, our objective and the best metric for owners to measure our progress is through the growth of free cash flow per share over the long term.
As engineers, we are fortunate to work on exciting technology which helps our customers innovate to create a better world. Technology is the foundation of our company, but ultimately, our objective and the best metric for owners to measure our progress is through the growth of free cash flow per share over the long term.
Microcontrollers are self-contained systems with a processor core, memory and peripherals that are designed to control a set of specific tasks for electronic equipment. DSPs perform mathematical computations almost instantaneously to process or improve digital data. Applications processors are designed for specific computing activity.
Microcontrollers are self-contained systems with a processor core, memory and peripherals that are designed to control a set of specific tasks for electronic equipment and often integrate analog functionality. Our processors are designed for specific computing activity in embedded applications.
Second, we will adapt and succeed in a world that is ever changing. And third, we will be a company that we are personally proud to be a part of and that we would want as our neighbor. Our ambitions are foundational to ensuring that we operate in a sustainable, socially thoughtful and environmentally responsible manner.
And third, we will be a company that we are personally proud to be a part of and that we would want as our neighbor. Our ambitions are foundational to ensuring that we operate in a sustainable and environmentally responsible manner. When we are successful in achieving these ambitions, our employees, customers, communities and shareholders all win.
Inclusion is one of our core values, and we have programs in place to promote diversity and inclusion. We encourage you to review our Corporate Citizenship Report for more information. Nothing in the Corporate Citizenship Report shall be deemed incorporated by reference into this report. Available information Our internet address is www.ti.com.
It is important that our employees represent a mix of experiences and backgrounds in order to make our company stronger, more innovative and more inclusive. We encourage you to review our Corporate Citizenship Report for more information. Nothing in the Corporate Citizenship Report shall be deemed incorporated by reference into this report. Available information Our internet address is www.ti.com.
Our passion continues to be alive today as we help our customers develop electronics and new applications, particularly in industrial and automotive markets. For many years, we have run our business with three overarching ambitions in mind. First, we will act like owners who will own the company for decades.
For many years, we have run our business with three overarching ambitions in mind. First, we will act like owners who will own the company for decades. Second, we will adapt and succeed in a world that is ever changing.
We have a promote-from-within culture and offer training and rotation programs that provide the opportunity to quickly gain experience in different areas. In 2023, our turnover rate was 8.1%. It is important that our employees represent a mix of experiences and backgrounds in order to make our company stronger, more innovative and more inclusive.
As a technology and manufacturing company, our success is grounded in having strong engineering talent and a reliable factory workforce. We have a promote-from-within culture and offer training and development programs that provide the opportunity to quickly gain experience in different areas. In 2024, our turnover rate was 9.1%.
Our investments in new and improved capabilities to directly support our customers include website and e-commerce enhancements as well as inventory consignment programs and order fulfillment services. Our TI.com e-commerce channel offers a localized online experience in many countries, with convenience features such as immediate availability, local currency, payment methods, invoicing and importer of record.
Our investments in new and improved capabilities to directly support our customers include order fulfillment services, inventory programs, business processes and logistics and website and e-commerce capabilities.
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When we are successful in achieving these ambitions, our employees, customers, communities and shareholders all win. As engineers, we are fortunate to work on exciting technology which helps our customers innovate to create a better world.
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As a result, in 2023 about 75% of our revenue was direct, which includes TI.com, as customers valued the convenience of purchasing online.
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Our new application programming interfaces (APIs) give customers the ability to directly access real-time information about TI products from their own systems, enabling them to purchase available chips immediately to better support their supply needs, reducing cost and delays.
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Bahai 61 Senior Vice President Mark S. Gary 49 Senior Vice President Haviv Ilan 55 Director, President and Chief Executive Officer Hagop H. Kozanian 41 Senior Vice President Shanon J. Leonard 48 Senior Vice President Rafael R. Lizardi 51 Senior Vice President and Chief Financial Officer Mark T.
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Roberts 48 Senior Vice President Amichai Ron 46 Senior Vice President Richard K. Templeton 65 Director and Chairman of the Board Cynthia Hoff Trochu 60 Senior Vice President, Secretary and General Counsel Christine A.
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Witzsche 39 Senior Vice President Mohammad Yunus 46 Senior Vice President The term of office of these officers is from the date of their election until their successor shall have been elected and qualified. All have been employees of the company for more than five years. Messrs. Bahai, Ilan, Kozanian, Lizardi and Templeton and Ms.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIncreased focus from government authorities, investors, customers and other key stakeholders on environmental, social and governance (ESG) matters has led to new and more stringent reporting standards and disclosure requirements.
Biggest changeIncreased focus from government authorities, investors, customers and other key stakeholders on environmental, social and governance (ESG) matters has led to new and more stringent reporting standards and disclosure requirements. As the nature, scope and complexity of ESG reporting, diligence and disclosure requirements expand, we might have to undertake costly efforts to control, assess and report on ESG metrics.
Our continued success depends in part on our ability to retain and recruit a sufficient number of qualified employees in a competitive environment. Our continued success depends in part on the retention and recruitment of skilled personnel as well as the contributions and effective succession of senior management and other key employees.
Our continued success depends in part on our ability to retain, train and recruit a sufficient number of qualified employees in a competitive environment. Our continued success depends in part on the retention and recruitment of skilled personnel as well as the contributions and effective succession of senior management and other key employees.
These events could, among other things, compromise our information technology networks; result in corrupt or lost data or the unauthorized release of our, our customers’ or our suppliers’ confidential or proprietary information; cause a disruption to our manufacturing and other operations (including our online services, platforms and transactions); result in the release of personal data; or cause us to incur costs associated with increased protection, remediation, regulatory inquiries or penalties, or claims for damages, any of which could adversely affect our operating results and our reputation.
These events could, among other things, compromise our information technology networks; result in corrupt or lost data or the unauthorized release of our or our customers’, suppliers’, and other third parties’ confidential or proprietary information; cause a disruption to our manufacturing and other operations (including our online services, platforms and transactions); result in the release of personal data; or cause us to incur costs associated with increased protection, remediation, regulatory inquiries or penalties, or claims for damages, any of which could adversely affect our operating results and our reputation.
In addition, we are subject to laws and regulations in various jurisdictions that determine how much profit has been earned and when it is subject to taxation in that jurisdiction. These laws and regulations can be complex and subject to interpretation.
We are subject to laws and regulations in various jurisdictions that determine how much profit has been earned and when it is subject to taxation in that jurisdiction. These laws and regulations can be complex and subject to interpretation.
We are exposed to political, social and economic conditions (including inflation), security risks, acts of war, terrorism or other hostile acts, pandemics, epidemics or other public health crises, labor conditions, climate change risks and possible disruptions in power, water supply, transportation, communications and information technology networks of the various countries in which we operate.
We are exposed to political, social and economic conditions, security risks, acts of war, terrorism or other hostile acts, pandemics, epidemics or other public health crises, labor conditions, climate change risks and possible disruptions in power, water supply, transportation, communications and information technology networks of the various countries in which we operate.
In particular, our manufacturing processes and critical manufacturing equipment, and those of our suppliers, require that certain key materials, natural resources, services and utilities be available. Suppliers of these items have and might continue to extend lead times, limit supply or increase prices due to factors beyond our control.
In particular, our manufacturing processes and critical manufacturing equipment, and those of our suppliers, require that certain key materials, services and utilities be available. Suppliers of these items have and might continue to extend lead times, limit supply or increase prices due to factors beyond our control.
We have manufacturing, data and design facilities and other operations in locations subject to natural occurrences such as severe weather, geological events or epidemics that could adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and equipment or otherwise disrupt operations.
We have manufacturing, data and design facilities and other operations in locations subject to natural occurrences such as severe weather, geological events or epidemics that could adversely affect manufacturing capacity, availability and cost of key materials, services, utilities and equipment or otherwise disrupt operations.
About 65% of our revenue comes from customers with headquarter locations outside the United States; revenue from end customers headquartered in China represents about 20% of our revenue. We also continue to expand our offerings of online transactions and services worldwide.
About 60% of our revenue comes from customers with headquarter locations outside the United States; revenue from end customers headquartered in China represents about 20% of our revenue. We also continue to expand our offerings of online transactions and services worldwide.
Our access to needed goods and services may be adversely affected by potential disputes with suppliers or disruptions in our own or suppliers’ operations as a result of, for example: quality excursions; uncertainty regarding the stability of global credit and financial markets; domestic or international political, social, economic and other conditions; natural events or epidemics in the locations in which our suppliers operate; or limited or delayed access to and high costs of key materials, natural resources, services and utilities.
Our access to needed goods and services may be adversely affected by potential disputes with suppliers or disruptions in our own or suppliers’ operations as a result of, for example: quality excursions; uncertainty regarding the stability of global credit and financial markets; domestic or international political, social, economic and other conditions; cybersecurity incidents; ability to access conflict-free minerals; natural events or epidemics in the locations in which our suppliers operate; or limited or delayed access to and high costs of key materials, services and utilities.
Our results of operations could be adversely affected by distributors’ promotion of competing product lines or our distributors’ financial performance. In 2023, about 25% of our revenue was generated from sales of our products through distributors. Our distributors carry competing product lines, and our sales could be affected if semiconductor distributors promote competing products over our products.
Our results of operations could be adversely affected by distributors’ promotion of competing product lines or our distributors’ financial performance. In 2024, about 20% of our revenue was generated from sales of our products through distributors. Our distributors carry competing product lines, and our sales could be affected if semiconductor distributors promote competing products over our products.
In addition, we operate in a highly competitive market environment that might adversely affect pricing for our products. Because we own much of our manufacturing capacity, a significant portion of our operating costs is fixed. With our planned capacity expansions, we expect capital expenditures and depreciation to increase.
In addition, we operate in a highly competitive market environment that might adversely affect pricing for our products. Because we own much of our manufacturing capacity, a significant portion of our operating costs is fixed. With our planned capacity expansions, capital expenditures and depreciation have increased.
Breaches, disruptions or other incidents relating to our information technology systems or the systems of our customers, suppliers and other third parties could be caused by factors such as computer viruses, ransomware, malware, system failures, restricted network access, unauthorized access, terrorism, nation-state espionage, employee malfeasance, or human error.
Breaches, disruptions or other incidents relating to our information technology systems or the systems of our customers, suppliers and other third parties could be caused by factors such as computer viruses, ransomware, malware, software vulnerabilities, system failures, restricted network access, unauthorized access, terrorism, nation-state espionage, employee malfeasance, use of artificial intelligence (AI) tools, or human error.
Improper, incorrect, illicit or unauthorized storage, handling, modification or use of our products (including use in applications for which our products were not designed), or use of counterfeit products, by third parties could result in reputational harm. Any of these events could adversely affect our results of operations, financial condition and reputation.
Improper, incorrect, illicit or unauthorized storage, handling, modification, diversion or use of our products, or use of counterfeit products, by third parties could result in reputational harm. Any of these events could adversely affect our results of operations, financial condition and reputation.
Changes in these laws and regulations, including those that align with the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting recommendations, could affect the locations where we are deemed to earn income, which could in turn affect our results of operations.
In addition, many countries have enacted or begun the process of enacting laws that align with the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting recommendations. Changes in these laws and regulations could affect the locations where we are deemed to earn income, which could in turn affect our results of operations.
Compliance with these laws, rules and regulations may be onerous and expensive and could restrict our ability to manufacture or ship our products and operate our business. From time to time, we receive inquiries from government entities regarding our compliance with laws and regulations.
Compliance with these laws, rules and regulations may be onerous and expensive and could restrict our ability to manufacture or ship our products and operate our business.
As the nature, scope and complexity of ESG reporting, diligence and disclosure requirements expand, we might have to undertake costly efforts to control, assess and report on ESG metrics. 12 Some of these complex laws, rules and regulations – for example, those related to environmental, safety and health requirements – may particularly affect us in the jurisdictions in which we manufacture products, especially if such laws and regulations: require the use of abatement equipment beyond what we currently employ; require the addition or elimination of a material or process to or from our current manufacturing processes; or impose costs, fees or reporting requirements on the direct or indirect use of energy, natural resources, or materials or gases used or emitted into the environment in connection with the manufacture of our products.
Any failure, or perceived failure, to achieve stated goals or meet stakeholder expectations and standards could adversely affect our results of operations and reputation. 12 Some of these complex laws, rules and regulations – for example, those related to environmental, safety and health requirements – may particularly affect us in the jurisdictions in which we manufacture products, especially if such laws and regulations: require the use of abatement equipment beyond what we currently employ; require the addition or elimination of a material or process to or from our current manufacturing processes; or impose costs, fees or reporting requirements on the direct or indirect use of energy, natural resources, or materials or gases used or emitted into the environment in connection with the manufacture of our products.
Our ability to recruit internationally or deploy employees to various locations may be limited by immigration laws and policies, including changes to, or the administration or interpretation of, those laws and policies. 11 Our results of operations and our reputation could be affected by warranty claims, product liability claims, product recalls or legal proceedings.
Our ability to recruit internationally or deploy employees to various locations may be limited by immigration laws and policies, including changes to, or the administration or interpretation of, those laws and policies.
If we do not comply with a law or regulation (or the same is alleged), or a government inquiry is unresolved, we could be subject to litigation, investigations or enforcement activity that can be unpredictable and time-consuming, as well as disruptions to our operations, or significant fines, penalties or other legal liability.
From time to time, we receive inquiries from government entities regarding our compliance with laws and regulations, and we could be subject to related litigation, investigations or enforcement activity that can be unpredictable and time-consuming, as well as disruptions to our operations, or significant fines, penalties or other legal liability.
Additionally, our costs may increase if one or more of our customers demand that we change the sourcing of materials we cannot identify as conflict-free. Our inability to timely implement new manufacturing technologies, install manufacturing equipment or secure necessary personnel for manufacturing operations could adversely affect our results of operations.
Limited or delayed access to and high costs of key materials, services and utilities could adversely affect our results of operations. Our inability to timely implement new manufacturing technologies, install manufacturing equipment or secure necessary personnel for manufacturing operations could adversely affect our results of operations.
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Limited or delayed access to and high costs of key materials, natural resources, services and utilities could adversely affect our results of operations. Our products contain materials that are subject to conflict minerals reporting requirements. Our relationships with customers and suppliers may be adversely affected if we are unable to describe our products as conflict-free.
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Failure to retain, train and recruit key personnel could disrupt our business and adversely affect our results of operations, financial condition and reputation. 11 Our results of operations and our reputation could be affected by warranty claims, product liability claims, product recalls or legal proceedings.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAnalog Embedded Processing North Texas (Dallas, Richardson and Sherman) X X Lehi, Utah X X South Portland, Maine X Santa Clara, California X Houston, Texas X Tucson, Arizona X Chengdu, China * X X Shanghai, China ** X X Freising, Germany X X Bangalore, India * X X Aizu, Japan X X Miho, Japan X X Kuala Lumpur, Malaysia * X X Melaka, Malaysia * X Aguascalientes, Mexico ** X Baguio, Philippines * X X Pampanga (Clark), Philippines * X X Taipei, Taiwan * X X * Portions of the facilities are leased and owned.
Biggest changeAnalog Embedded Processing North Texas (Dallas, Richardson and Sherman) X X Lehi, Utah X X South Portland, Maine X Santa Clara, California * X Houston, Texas X Tucson, Arizona X Chengdu, China ** X X Shanghai, China * X X Freising, Germany X X Bangalore, India ** X X Aizu, Japan X X Miho, Japan X X Kuala Lumpur, Malaysia ** X X Melaka, Malaysia ** X Aguascalientes, Mexico * X Baguio, Philippines ** X X Pampanga (Clark), Philippines ** X X Taipei, Taiwan ** X X * Leased. ** Portions of the facilities are leased and owned.
At the end of 2023, we occupied substantially all of the space in our facilities. Leases covering our currently occupied leased facilities expire at varying dates, generally within the next five years. We believe our current properties are suitable and adequate for their intended purpose.
At the end of 2024, we occupied substantially all of the space in our facilities. Leases covering our currently occupied leased facilities expire at varying dates, generally within the next five years. We believe our current properties are suitable and adequate for their intended purpose.
This may include land leases. ** Leased. Our facilities in the United States contained approximately 16.1 million square feet at December 31, 2023, of which approximately 0.4 million square feet were leased. Our facilities outside the United States contained approximately 12.7 million square feet at December 31, 2023, of which approximately 2.4 million square feet were leased.
This may include land leases. Our facilities in the United States contained approximately 17.6 million square feet at December 31, 2024, of which approximately 0.5 million square feet were leased. Our facilities outside the United States contained approximately 12.7 million square feet at December 31, 2024, of which approximately 2.3 million square feet were leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Pursuant to SEC regulation, we have elected to use a disclosure threshold of $1 million in monetary sanctions for environmental proceedings involving a governmental authority .

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) In addition to open-market purchases, 10,409 shares of common stock were surrendered by employees to satisfy tax withholding obligations in connection with the vesting of restricted stock units. (c) As of December 31, 2023, this amount consisted of the remaining portion of the $12.0 billion authorized in September 2018 and the $15.0 billion authorized in September 2022.
Biggest change(b) As of December 31, 2024, this amount consisted of the remaining portion of the $12.0 billion authorized in September 2018 and the $15.0 billion authorized in September 2022. No expiration date has been specified for these authorizations.
ITEM 5. Market for Registrant’s common equity, related stockholder matters and issuer purchases of equity securities TI common stock is quoted on The Nasdaq Global Select Market under the ticker symbol TXN. At December 31, 2023, we had 11,261 stockholders of record. The following table contains information regarding our purchases of our common stock during the fourth quarter of 2023.
ITEM 5. Market for Registrant’s common equity, related stockholder matters and issuer purchases of equity securities TI common stock is quoted on The Nasdaq Global Select Market under the ticker symbol TXN. At December 31, 2024, we had 10,729 stockholders of record. The following table contains information regarding our purchases of our common stock during the fourth quarter of 2024.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) October 1, 2023 through October 31, 2023 329,147 $ 149.62 318,738 $ 21.21 billion November 1, 2023 through November 30, 2023 76,200 148.19 76,200 21.20 billion December 1, 2023 through December 31, 2023 17,652 157.14 17,652 21.20 billion Total 422,999 (b) $ 149.67 (b) 412,590 $ 21.20 billion (c) (a) All open-market purchases during the quarter were made under the authorizations from our board of directors to purchase up to $12.0 billion and $15.0 billion of additional shares of TI common stock announced September 20, 2018, and September 15, 2022, respectively.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) October 1 - 31, 2024 550,939 $ 202.26 550,939 $ 20.69 billion November 1 - 30, 2024 854,198 203.84 854,198 20.51 billion December 1 - 31, 2024 1,348,059 191.23 1,348,059 20.26 billion (b) Total 2,753,196 2,753,196 (a) All open-market purchases during the quarter were made under the authorizations from our board of directors to purchase up to $12.0 billion and $15.0 billion of additional shares of TI common stock announced September 20, 2018, and September 15, 2022, respectively.
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No expiration date has been specified for these authorizations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGross profit of $11.02 billion was down $2.75 billion, or 20.0%, primarily due to lower revenue and, to a lesser extent, higher manufacturing costs associated with planned capacity expansion and reduced factory loadings. As a percentage of revenue, gross profit decreased to 62.9% from 68.8%. Operating expenses (R&D and SG&A) were $3.69 billion compared with $3.37 billion.
Biggest changeAs a percentage of revenue, gross profit decreased to 58.1% from 62.9%. Operating expenses (R&D and SG&A) were $3.75 billion compared with $3.69 billion. Restructuring charges/other was a credit of $124 million primarily due to a gain on the sale of a property during 2024. See Note 11 to the financial statements.
Results of operations Our strategic focus is on analog and embedded processing products. We sell our products into six end markets: industrial, automotive, personal electronics, communications equipment, enterprise systems and other.
Results of operations Our strategic focus is on analog and embedded processing products. We sell our products into six end markets: industrial, automotive, personal electronics, enterprise systems, communications equipment and other.
Discussion of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s discussion and analysis of financial condition and results of operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Discussion of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s discussion and analysis of financial condition and results of operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
We consider the following accounting policies to be those that are most important to the portrayal of our financial condition and that require a higher degree of judgment. 21 Income taxes In determining net income for financial statement purposes, we must make certain estimates and judgments in the calculation of tax provisions and the resultant tax liabilities and in the recoverability of deferred tax assets that arise from temporary differences between the tax and financial statement recognition of revenue and expense.
We consider the following accounting policies to be those that are most important to the portrayal of our financial condition and that require a higher degree of judgment. 21 Income taxes In determining net income for financial statement purposes, we must make certain estimates and judgments in the calculation of tax provisions and the resultant tax liabilities that arise from temporary differences between the tax and financial statement recognition of revenue and expense.
We recognize potential liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on an estimate of the ultimate resolution of whether, and the extent to which, additional taxes will be due.
We determine potential liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on an estimate of the ultimate resolution of whether, and the extent to which, additional taxes will be due.
We make our investments with an eye towards long-term strengthening and leveraging of these advantages. 2. Discipline in allocating capital to the best opportunities. This spans how we select R&D projects, develop new capabilities like TI.com, invest in new manufacturing capacity or how we think about acquisitions and returning cash to our owners. 3.
We make our investments with an eye towards long-term strengthening and leveraging of these advantages. 2. Discipline in allocating capital to the best opportunities. This spans how we select R&D projects, develop new capabilities, invest in manufacturing capacity or how we think about acquisitions and returning cash to our owners. 3.
Our results of operations provides details of our financial results for 2023 and 2022 and year-to-year comparisons between 2023 and 2022.
Our results of operations provides details of our financial results for 2024 and 2023 and year-to-year comparisons between 2024 and 2023.
Our effective tax rate, which includes discrete tax items, was 12.2% in 2023 compared with 12.8% in 2022. See Note 4 to the financial statements for a reconciliation of the U.S. statutory corporate tax rate to our effective tax rate. Net income was $6.51 billion compared with $8.75 billion.
Our effective tax rate, which includes discrete tax items, was 12.0% in 2024 compared with 12.2% in 2023. See Note 4 to the financial statements for a reconciliation of the U.S. statutory corporate tax rate to our effective tax rate. Net income was $4.80 billion compared with $6.51 billion.
We had $2.96 billion of cash and cash equivalents and $5.61 billion of short-term investments as of December 31, 2023. We believe we have the necessary financial resources and operating plans to fund our working capital needs, capital expenditures, dividend and debt-related payments and other business requirements for at least the next 12 months.
We had $3.20 billion of cash and cash equivalents and $4.38 billion of short-term investments as of December 31, 2024. We believe we have the necessary financial resources and operating plans to fund our working capital needs, capital expenditures, dividend and debt-related payments and other business requirements for at least the next 12 months.
Interest and debt expense of $353 million increased $139 million due to the issuance of additional long-term debt. See Note 8 to the financial statements. Our provision for income taxes was $908 million compared with $1.28 billion. This decrease was due to lower income before income taxes.
Interest and debt expense of $508 million increased $155 million due to the issuance of additional long-term debt. See Note 8 to the financial statements. Our provision for income taxes was $654 million compared with $908 million. This decrease was due to lower income before income taxes.
Liquidity and capital resources Our primary source of liquidity is cash flow from operations. Additional sources of liquidity are cash and cash equivalents, short-term investments and access to debt markets. We also have a variable-rate, revolving credit facility. As of December 31, 2023, our credit facility was undrawn, and we had no commercial paper outstanding.
Additional sources of liquidity are cash and cash equivalents, short-term investments and access to debt markets. We also have a variable-rate, revolving credit facility. As of December 31, 2024, our credit facility was undrawn, and we had no commercial paper outstanding.
The calculation of tax liabilities involves dealing with uncertainties in the interpretation and application of complex tax laws, and significant judgment is necessary to (i) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (ii) measure the amount of tax benefit that qualifies for recognition.
The evaluation of tax liabilities involves dealing with uncertainties in the interpretation and application of complex tax laws, and significant judgment is necessary to determine whether, based on the technical merits, a tax position is more likely than not to be sustained.
Our cash flow from operations of $6.42 billion underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow was $1.35 billion and represented 7.7% of revenue. During 2023, we invested $3.69 billion in R&D and SG&A, invested $5.07 billion in capital expenditures and returned $4.85 billion to shareholders.
Our cash flow from operations of $6.32 billion underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow was $1.50 billion and represented 9.6% of revenue. During 2024, we invested $3.75 billion in R&D and SG&A, invested $4.82 billion in capital expenditures and returned $5.72 billion to shareholders.
Operating profit was $7.33 billion, or 41.8% of revenue, compared with $10.14 billion, or 50.6% of revenue. Other income and expense (OI&E) was $440 million of income compared with $106 million of income, due to higher interest income. See Note 11 to the financial statements.
Operating profit was $5.47 billion, or 34.9% of revenue, compared with $7.33 billion, or 41.8% of revenue. Other income and expense (OI&E) was $496 million of income compared with $440 million of income, due to interest income. See Note 11 to the financial statements.
Short-term investments provided cash proceeds of $682 million in 2023 compared with $826 million of cash used in 2022. 20 As we continue to invest to strengthen our competitive advantage in manufacturing and technology as part of our long-term capacity planning, our capital expenditures are expected to continue to be higher than historical levels.
Short-term investments provided cash proceeds of $1.47 billion in 2024 compared with $682 million in 2023. 20 As we continue to invest to strengthen our competitive advantages in manufacturing and technology, as part of our long-term capacity planning, our capital expenditures are expected to remain at elevated levels.
Financial condition At the end of 2023, total cash (cash and cash equivalents plus short-term investments) was $8.58 billion, a decrease of $492 million from the end of 2022. Accounts receivable were $1.79 billion, a decrease of $108 million compared with the end of 2022.
Financial condition At the end of 2024, total cash (cash and cash equivalents plus short-term investments) was $7.58 billion, a decrease of $995 million from the end of 2023. Accounts receivable were $1.72 billion, a decrease of $68 million compared with the end of 2023. Days sales outstanding at the end of 2024 and 2023 were 39.
Although we believe the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different from what is reflected in the historical income tax provisions and accruals. Inventory valuation allowances Inventory is valued net of allowances for unsalable or obsolete raw materials, work in process and finished goods.
Although we believe our analysis of the underlying issues and the associated estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different from what is reflected in the historical income tax provisions and accruals.
For Years Ended December 31, 2023 2022 Cash flow from operations (GAAP) $ 6,420 $ 8,720 Capital expenditures (5,071) (2,797) Free cash flow (non-GAAP) $ 1,349 $ 5,923 Revenue $ 17,519 $ 20,028 Cash flow from operations as a percentage of revenue (GAAP) 36.6 % 43.5 % Free cash flow as a percentage of revenue (non-GAAP) 7.7 % 29.6 % Critical accounting estimates Our accounting policies are more fully described in Note 2 of the consolidated financial statements.
For Years Ended December 31, 2024 2023 Cash flow from operations (GAAP) * $ 6,318 $ 6,420 Capital expenditures (4,820) (5,071) Free cash flow (non-GAAP) $ 1,498 $ 1,349 Revenue $ 15,641 $ 17,519 Cash flow from operations as a percentage of revenue (GAAP) 40.4 % 36.6 % Free cash flow as a percentage of revenue (non-GAAP) 9.6 % 7.7 % * Includes a cash benefit of $588 million from the CHIPS Act ITC used to reduce income taxes payable for 2024 Critical accounting estimates Our accounting policies are more fully described in Note 2 of the consolidated financial statements.
Other (includes DLP ® products, calculators and custom ASIC products) 2023 2022 Change Revenue $ 1,111 $ 1,408 (21) % Operating profit * 502 528 (5) % Operating profit % of revenue 45.2 % 37.5 % * Includes restructuring charges/other Other revenue decreased $297 million, and operating profit decreased $26 million.
Other (includes DLP ® products, calculators and custom ASIC products) 2024 2023 Change Revenue $ 947 $ 1,111 (15) % Operating profit * 505 502 1 % Operating profit % of revenue 53.3 % 45.2 % * Includes restructuring charges/other Other revenue decreased $164 million, and operating profit increased $3 million.
In 2023, we received net proceeds of $3.00 billion from the issuance of fixed-rate, long-term debt and retired maturing debt of $500 million. In 2022, we received net proceeds of $1.49 billion from the issuance of fixed-rate, long-term debt and retired maturing debt of $500 million.
In 2023, we received net proceeds of $3.00 billion from the issuance of fixed-rate, long-term debt and retired maturing debt of $500 million. Dividends paid in 2024 were $4.80 billion compared with $4.56 billion in 2023, reflecting an increased dividend rate.
EPS was $7.07 compared with $9.41. 19 Segment results – 2023 compared with 2022 Analog (includes Power and Signal Chain product lines) 2023 2022 Change Revenue $ 13,040 $ 15,359 (15) % Operating profit 5,821 8,359 (30) % Operating profit % of revenue 44.6 % 54.4 % Analog revenue decreased in both product lines about equally.
EPS was $5.20 compared with $7.07. 19 Segment results – 2024 compared with 2023 Analog (includes Power and Signal Chain product lines) 2024 2023 Change Revenue $ 12,161 $ 13,040 (7) % Operating profit 4,608 5,821 (21) % Operating profit % of revenue 37.9 % 44.6 % Analog revenue decreased due to the mix of products shipped in both product lines, led by Signal Chain.
Operating profit decreased primarily due to lower revenue and higher manufacturing costs. Embedded Processing (includes microcontrollers and processors) 2023 2022 Change Revenue $ 3,368 $ 3,261 3 % Operating profit 1,008 1,253 (20) % Operating profit % of revenue 29.9 % 38.4 % Embedded Processing revenue increased due to the mix of products shipped.
Operating profit decreased primarily due to lower revenue and higher manufacturing costs. Embedded Processing (includes microcontrollers and processors) 2024 2023 Change Revenue $ 2,533 $ 3,368 (25) % Operating profit 352 1,008 (65) % Operating profit % of revenue 13.9 % 29.9 % Embedded Processing revenue decreased. Operating profit decreased primarily due to lower revenue and associated gross profit.
Dividends paid in 2023 were $4.56 billion compared with $4.30 billion in 2022, reflecting an increased dividend rate. We used $293 million to repurchase 1.8 million shares of our common stock compared with $3.62 billion used in 2022 to repurchase 22.2 million shares. Employee exercises of stock options provided cash proceeds of $263 million compared with $241 million in 2022.
We used $929 million to repurchase 4.7 million shares of our common stock compared with $293 million used in 2023 to repurchase 1.8 million shares. Employee exercises of stock options provided cash proceeds of $517 million compared with $263 million in 2023.
Capital expenditures were $5.07 billion compared with $2.80 billion in 2022 and were primarily for semiconductor manufacturing equipment and facilities in both periods.
CHIPS and Science Act (CHIPS Act) investment tax credit (ITC) used to reduce income taxes payable. Investing activities for 2024 used $3.20 billion compared with $4.36 billion in 2023. Capital expenditures were $4.82 billion compared with $5.07 billion in 2023 and were primarily for semiconductor manufacturing equipment and facilities in both periods.
Days sales outstanding at the end of 2023 were 39 compared with 37 at the end of 2022. Inventory was $4.00 billion, an increase of $1.24 billion from the end of 2022. Days of inventory at the end of 2023 were 219 compared with 157 at the end of 2022.
Inventory was $4.53 billion, an increase of $528 million from the end of 2023. Days of inventory at the end of 2024 were 241 compared with 219 at the end of 2023. Liquidity and capital resources Our primary source of liquidity is cash flow from operations.
Details of financial results – 2023 compared with 2022 Revenue of $17.52 billion decreased $2.51 billion, or 12.5%, primarily due to lower revenue from Analog, partially offset by higher revenue from Embedded Processing.
Details of financial results – 2024 compared with 2023 Revenue of $15.64 billion decreased $1.88 billion, or 10.7%, due to lower revenue from Analog and Embedded Processing. Gross profit of $9.09 billion was down $1.93 billion, or 17.5%, primarily due to lower revenue and, to a lesser extent, higher manufacturing costs associated with our planned capacity expansions.
Actual future write-offs of inventory for salability and obsolescence reasons may differ from estimates and calculations used to determine valuation allowances due to changes in customer demand, customer negotiations, technology shifts and other factors. Commitments and contingencies See Note 10 to the financial statements for a discussion of our commitments and contingencies. 22
Commitments and contingencies See Note 10 to the financial statements for a discussion of our commitments and contingencies. 22
Cash flows from operating activities for 2023 were $6.42 billion, a decrease of $2.30 billion due to lower net income and higher cash used for working capital, as we continued to strategically build inventory. Investing activities for 2023 used $4.36 billion compared with $3.58 billion in 2022.
Cash flows from operating activities for 2024 were $6.32 billion, a decrease of $102 million due to lower net income, partially offset by lower cash used for working capital. Cash flows from operating activities for 2024 include a cash benefit of $588 million from the U.S.
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This increase was primarily due to higher employee-related costs as we invest to strengthen our competitive advantages. Restructuring charges/other in the year-ago period was $257 million due to preproduction costs at our Lehi, Utah, manufacturing facility. These costs transitioned primarily to cost of revenue after production began in December 2022. See Note 11 to the financial statements.
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We expect to receive between $7.5 billion to $9.5 billion through 2034 from the CHIPS Act. This includes the ITC for qualified U.S. manufacturing investments and direct funding of up to $1.6 billion for our three large-scale 300mm wafer fabs currently under construction in Sherman, Texas, and Lehi, Utah.
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Operating profit decreased primarily due to higher manufacturing costs, partially offset by higher revenue.
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We received $588 million in associated cash benefit from qualifying capital expenditures in 2024. Financing activities for 2024 used $2.88 billion compared with $2.14 billion in 2023. In 2024, we received net proceeds of $2.98 billion from the issuance of fixed-rate, long-term debt and retired maturing debt of $600 million.
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In August 2022, the U.S. government enacted the U.S. CHIPS and Science Act, which provides funding for manufacturing grants and research investments and establishes a 25% investment tax credit for certain investments in U.S. semiconductor manufacturing.
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We expect to receive the cash benefit associated with the investment tax credit for qualifying capital expenditures in future periods, and we have submitted applications for the manufacturing grants provided by the legislation. See Note 11 to the financial statements. Financing activities for 2023 used $2.14 billion compared with $6.72 billion in 2022.
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Statistical allowances are determined quarterly for raw materials and work in process based on historical disposals of inventory for salability and obsolescence reasons. For finished goods, quarterly statistical allowances are determined by comparing inventory levels of individual parts to historical shipments, current backlog and estimated future sales in order to identify inventory considered unlikely to be sold.
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A specific allowance for each material type will be carried if there is a significant event not captured by the statistical allowance, such as an end-of-life part or demand with imminent risk of cancellation. Allowances are also calculated quarterly for instances where inventoried costs for individual products are in excess of the net realizable value for those products.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBecause interest rates on our long-term debt are fixed, changes in interest rates would not affect the cash flows associated with long-term debt. Equity risk Long-term investments at year-end 2023 include the following: • Investments in mutual funds – includes mutual funds that were selected to generate returns that offset changes in certain liabilities related to deferred compensation arrangements.
Biggest changeBecause interest rates on our long-term debt are fixed, changes in interest rates would not affect the cash flows associated with long-term debt. 23
As of December 31, 2023, a hypothetical 100 basis point increase in interest rates would decrease the fair value of our investments in cash equivalents and short-term investments by about $22 million and decrease the fair value of our long-term debt by $891 million.
As of December 31, 2024, a hypothetical 100 basis point increase in interest rates would decrease the fair value of our investments in cash equivalents and short-term investments by about $22 million and decrease the fair value of our long-term debt by $952 million.
Because most of the aggregate non-U.S. dollar balance sheet exposure is hedged by forward currency exchange contracts, which are based on year-end 2023 balances and currency exchange rates, a hypothetical 10% plus or minus fluctuation in non-U.S. currency exchange rates relative to the U.S. dollar would result in a pretax currency exchange gain or loss of approximately $4 million.
Because most of the aggregate non-U.S. dollar balance sheet exposure is hedged by forward currency exchange contracts, which are based on year-end 2024 balances and currency exchange rates, a hypothetical 10% plus or minus fluctuation in non-U.S. currency exchange rates relative to the U.S. dollar would result in a pretax currency exchange gain or loss of less than $1 million.
As of December 31, 2023, we had forward currency exchange contracts outstanding with a notional value of $328 million to hedge net balance sheet exposures (including $102 million to sell Japanese yen, $77 million to sell British pounds and $58 million to buy Chinese yuan). Similar hedging activities existed at year-end 2022.
As of December 31, 2024, we had forward currency exchange contracts outstanding with a notional value of $565 million to hedge net balance sheet exposures (including $180 million to buy Indian rupee, $91 million to sell British pounds and $78 million to sell Japanese yen). Similar hedging activities existed at year-end 2023.
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The mutual funds hold a variety of debt and equity investments. • Investments in venture capital funds – includes investments in limited partnerships (accounted for under either the equity method or at cost with adjustments to observable market changes or impairments). • Equity investments – includes nonmarketable (nonpublicly traded) equity securities. Investments in mutual funds are stated at fair value.
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Changes in prices of the mutual fund investments are expected to offset related changes in certain deferred compensation liabilities. Nonmarketable equity securities and certain venture capital funds are stated at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Investments in the remaining venture capital funds are stated using the equity method.
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See Note 6 to the financial statements for details of equity and other long-term investments. We also utilize total return swaps to economically hedge exposure to changes in liabilities related to the market risks of certain deferred compensation arrangements with employees.
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Gains or losses from changes in the fair value of these total return swaps generally offset the related losses or gains on the deferred compensation liabilities. 23

Other TXN 10-K year-over-year comparisons