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Financial objectives
We believe Analog and Embedded Processing are great opportunities for TI. Both represent large markets, with diverse customers and a fragmented competitor base. The products themselves can have life cycles that span decades. Unlike some digital chips, analog has the added advantage of not needing the leading-edge manufacturing technology that requires significant cash investments every few years. Rather, analog chips can be manufactured on mature equipment and with processes that have significantly longer replacement cycles. Given their required investment and proven return, both provide very attractive business models.
In 2010, we had the No. 1 position in Analog with about 14 percent share, and the No. 2 position in Embedded Processing with about 11 percent share, giving us ample opportunities for growth.
Against this market backdrop, TI has some unique competitive advantages. The breadth of our product portfolio, the widest in the industry, enables us to serve more of our customers' needs on any given customer sales call. The size and location of our sales force also advantages us. We have several times the number of sales and applications engineers than our closest competitors. And we've taken steps to ensure that our sales force is in fast-growing markets like China and India as well as close to existing customers and hubs of technology development so we can be well positioned to serve current and future customers wherever they might develop. Finally, we continue to adapt our manufacturing strategy to further position it as a competitive advantage.
We're in production in the industry's first 300-millimeter analog fab, which will enable to us to produce more chips per wafer at lower costs. We also took advantage of our business models strong cash-generation capability to acquire new manufacturing capacity at low cost while many of our competitors were closing fabs or cutting their capital expenditures in the uncertain economic climate of the last few years. With what we are currently bringing online, this added capacity will support more than $5 billion of additional annual revenue when it is fully used. And given most of these purchases were made at a fraction of their original cost, our capital expenditures have not soared and the long-term impact on our depreciation of these capacity additions will be negligible.
Given the attractiveness of these markets, our positions in each and the competitive advantages we enjoy, we believe we can grow our Analog and Embedded Processing businesses, on a compounded annual growth rate basis, at 2x the market over a three-to-five year timeframe.
In our Wireless business, we have an equally aggressive but slightly different goal for top-line growth. Since our resources and energies in Wireless are primarily focused on smartphones, which is already growing at healthy double-digits rate, we would define success as outpacing the smartphone semiconductor market, whatever that growth rate may be. We believe we have the product roadmap, design-ins and tools in place to deliver this kind of performance over the next three-to-five years.
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