TI's manufacturing strategy, which combines internal and third-party foundry manufacturing, gives us greater flexibility to respond to shifts in customer demand while helping the company achieve stable, superior financial results.
Since it was first implemented in 2001, the strategy has continued to evolve. We gradually increased the amount of digital manufacturing we do with our foundries until today, about 50 percent of our advanced logic is produced in foundries. Moving forward, we expect that percentage to continue to increase as more of our internal manufacturing resources are focused on analog. We've also transitioned our digital process technology development to our foundry partners, enabling us to reduce our capital expenditures while freeing up resources to focus more on analog. As an example, in 2007, we increased our analog R&D teams by 50 percent while expanding our analog manufacturing capacity. As the manufacturing strategy becomes more analog focused, it has enabled us to stabilize our depreciation, allowing us to have much better utilization of capital and a much lower capital footprint moving forward.
Bottom line: Our manufacturing strategy is allowing us to provide better customer support while increasing our capital efficiency, cash flow and return on invested capital.
SVP Kevin Ritchie explains how TI's manufacturing strategy benefits TI and continues to evolve.
(2:57)
