To reach our margin goals, we have to maintain discipline in our operating expenses, while continuing to invest for the future.
Our operating expense goals are to achieve:
R&D expenditures of about 15 percent of revenue, and
SG&A expenditures of about 10 percent of revenue.
Knowing where to focus those investments is a critical element of our future success.
In R&D, we are focusing our investments in areas that offer TI high-growth potential and profits – areas like analog, embedded processing and wireless applications processing.
In Analog, we’re focusing R&D investments on leadership process technologies that are allowing us to annually deploy hundreds of new leadership products. Farther out, we’re looking at the technologies and materials that can be disruptive, breaking new ground in areas like ultra-low power or no power, medical and energy harvesting. In the digital space, we’re continuing to hit our CMOS milestones by collaborating with world-class foundry partners on current and future process technology nodes, while in Embedded Processing, we’re focusing on applications where customers overlay their software on TI processors, leading to long-lasting engagements. Finally, in Wireless, we’re shifting R&D investments to applications processors, where TI enjoys a strong position in this fast-growing market.
In SG&A, we understand the importance of balancing cost discipline with making strategic investments that will fuel future growth and have consciously been expanding our sales force and applications support over the last several years. In 2007, we expanded our sales force in most regions of the world as well as increased the technical support we provide customers by adding 20 percent more analog applications engineers to work directly with customers in the field, especially in emerging regions.
We believe our sales force may be our greatest single competitive advantage that we have and will continue to invest in this area in order to win more business and better support our customers. Because of our size, we can invest more money in our sales force and have more of our support people working with customers on a daily basis. It gives us the opportunity to capture more customers and capture more dollars per customer, providing us with our most strategic advantage to grow.
CEO Rich Templeton describes where TI’s R&D dollars are being invested.
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CEO Rich Templeton describes how investing in our sales force is a strategic advantage.
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