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Corporate overview
 Our inventory is at higher levels than what we have historically held. This reflects both the mix of our products, with more of our revenue coming from catalog products than in years past, and our strategic decision to move more of our revenue upstream to TI through consignment programs, both at customers and distributors.
Our inventory practices vary by product type. For catalog products, where the risk of obsolescence is low, we generally carry higher levels of inventory. These products usually have many customers and long life cycles, and are often ordered in small quantities. Catalog product inventory is sometimes held in unfinished form, giving us greater flexibility to meet final package and test configurations in a timely manner.
For custom products, where the risk of obsolescence is higher, we carry lower levels of inventory, when possible. These products usually have a single customer, are sold in high volumes and have shorter life cycles. Life cycles of these products are often determined by end-equipment upgrade cycles and can be as short as 12 to 24 months.
Approximately 50 percent of our revenue goes through our distribution channel, about half of which is supported by consignment programs. Overall, about 45 percent of our revenue is supported by consignment or just-in-time (JIT) programs.
Our target inventory days are in the range of 105-115 days. Given the composition of our product portfolio and the degree to which we are supporting consignment programs at customers and distributors, we believe this level of inventory is appropriate to support customer needs.
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