Texas Instruments (TXN) 10-K risk factor changes: FY2023 vs FY2022

About 65% of our revenue comes from customers with headquarter locations outside the United States; revenue from end customers headquartered in China represents about [removed: 25%] [added: 20%] of our revenue.

We are exposed to political, social and economic conditions (including inflation), security risks, acts of war, terrorism or other hostile acts, [added: pandemics, epidemics or other public] health [removed: conditions and epidemics,] [added: crises,] labor conditions, climate change risks and possible disruptions in [added: power, water supply,] transportation, communications and information technology networks of the various countries in which we operate.

Certain competitors possess sufficient financial, technical and management resources [added: and utilize available incentives offered by various countries and government entities] to develop and market products that may compete favorably against our products, and consolidation among our competitors may allow them to compete more effectively.

Our results of operations also might suffer because of a general decline [added: or volatility] in customer demand resulting from, for example: uncertainty regarding the stability of global credit and financial markets; natural events, [added: pandemics,] epidemics or domestic or international political, social, economic or other conditions; breaches of customer information technology systems that disrupt customer operations; or a customer’s inability to access credit markets and other sources of needed liquidity.

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 [removed: operations;] [added: 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.

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 [added: adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and equipment or otherwise] disrupt operations.

Climate change might exacerbate these occurrences or cause natural disasters to occur with greater [removed: frequency.][added: frequency and with more intense effects.]

[removed: The effects] [added: Any] of [removed: the COVID-19 pandemic] [added: these factors] could adversely affect our [removed: business,] results of [removed: operations and] [added: operations,] financial [removed: condition.][added: condition and reputation.]

Our inability to timely implement new manufacturing [removed: technologies or] [added: technologies,] install manufacturing equipment [added: or secure necessary personnel for manufacturing operations] could adversely affect our results of operations.

We subcontract a portion of our wafer fabrication and assembly and testing of our products, and we depend on third parties [added: (including contractors and other service providers)] to [removed: provide] [added: support key portions of our operations (including manufacturing operations and] advanced logic manufacturing process technology [removed: development.][added: development) and to construct our facilities.]

Reliance on these suppliers involves risks, including possible shortages of capacity in periods of high demand, suppliers’ inability to develop and deliver advanced logic manufacturing process technology [added: or build facilities] in a timely, cost-effective, and appropriate manner, the possibility of suppliers’ imposition of increased costs on us and the unauthorized disclosure or use of our intellectual property.

Our continued success depends in part on the retention and recruitment of skilled [removed: personnel,] [added: personnel] as well as the [added: contributions and] effective [removed: management of] succession [removed: for] [added: of senior management and other] key employees.

There can be no assurance that we will be able to successfully [removed: retain] [added: retain, train] and recruit the key engineering, management and technical personnel that we require to execute our business strategy.

In [removed: 2022,] [added: 2023,] about [removed: 30%] [added: 25%] of our revenue was generated from sales of our products through distributors.

We are subject to complex laws, rules and regulations on an international, national and local level that affect our domestic and international operations relating to, for example, the environment and climate change; safety; health; [removed: trade;] [added: trade, including import and export;] bribery and corruption; financial reporting; tax; data privacy and protection; labor and employment; competition; facilities and code compliance; market access; [removed: epidemics;] [added: pandemics, epidemics or other public health crises;] intellectual property ownership and infringement; and the movement of currency.

We, directly and indirectly, face infringement claims from third parties, including [removed: non-practicing] [added: nonpracticing] entities that have acquired patents to pursue enforcement actions against other companies.

However, our efforts cannot prevent all misappropriation or improper use of our protected technology and information, including, for example, third parties’ use of our patented or copyrighted technology, [removed: or] our trade [removed: secrets] [added: secrets, or unauthorized copying and cloning,] in their products without the right to do so, or third parties’ sale of counterfeit products bearing our trademark.

We also continue to expand our offerings of online transactions and services worldwide.

In addition, failure by these suppliers to fulfill expectations, commitments and responsibilities in accordance with agreed terms or applicable laws, rules and regulations (including health, safety, forced labor, human trafficking and supply chain standards) could adversely affect our results of operations, financial condition and reputation.

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.

From time to time, we receive inquiries from government entities regarding our compliance with laws and regulations.

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.

We have received and may in the future continue to receive government incentives, including but not limited to tax incentives, designed to encourage certain investments in our operations.

We may be subject to increased scrutiny from government entities, shareholders and others on how these incentives are used and spent.

Such incentives could be subject to reduction, modification, clawback or termination, and such changes to these incentives could adversely affect our results of operations, financial condition and reputation.

Activities such as those listed above may affect our reputation and impede our ability to sell our products.

Alternatively, based on product shipment destination, about 90% of our revenue comes from products shipped to locations outside the United States.

The coronavirus (COVID-19) pandemic and related measures to curtail its spread have impacted, and may continue to impact, our operations across markets in which TI operates and those of our suppliers, customers and distributors.

The extent to which the COVID-19 pandemic will continue to affect our business, results of operations and financial condition is difficult to predict and depends on numerous evolving factors including the duration and scope of the pandemic; government, social, business and other actions that have been and will be taken in response to the pandemic; appearance of new variants of COVID-19; the availability, adoption and efficacy of vaccines and treatments; and the effect of the pandemic on short- and long-term general economic conditions.

We have experienced, and continue to experience, short- or long-term constrained supply or volatility in customer demand, which could materially and adversely affect our business and financial results.

If we do not comply or if we become subject to enforcement activity or government investigations, we could be subject to fines, penalties or other legal liability or disruptions to our operations.

The risk of unfair copying or cloning may impede our ability to sell our products.

Our results of operations provides details of our financial results for [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] and year-to-year comparisons between [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

Discussion of [removed: 2020] [added: 2021] items and year-to-year comparisons between [removed: 2021] [added: 2022] and [removed: 2020] [added: 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, [removed: 2021.][added: 2022.]

Our cash flow from operations of [removed: $8.72] [added: $6.42] billion underscored the strength of our business [removed: model.][added: model, the quality of our product portfolio and the benefit of 300mm production.]

Free cash flow was [removed: $5.92] [added: $1.35] billion and represented [removed: 29.6%] [added: 7.7%] of revenue.

Details of financial results – [removed: 2022] [added: 2023] compared with [removed: 2021][added: 2022]

As a percentage of revenue, gross profit [removed: increased] [added: decreased] to [removed: 68.8%] [added: 62.9%] from [removed: 67.5%.][added: 68.8%.]

Operating expenses (R&D and SG&A) were [removed: $3.37] [added: $3.69] billion compared with [removed: $3.22 billion, as a result of increased investments in R&D and inflation.][added: $3.37 billion.]

Operating profit was [removed: $10.14] [added: $7.33] billion, or [removed: 50.6%] [added: 41.8%] of revenue, compared with [removed: $8.96] [added: $10.14] billion, or [removed: 48.8%] [added: 50.6%] of revenue.

Other income and expense (OI&E) was [removed: $106] [added: $440] million of income compared with [removed: $143] [added: $106] million of [added: income, due to higher interest] income.

Interest and debt expense of [removed: $214] [added: $353] million increased [removed: $30] [added: $139] million due to the issuance of additional long-term debt.

Our provision for income taxes was [removed: $1.28 billion] [added: $908 million] compared with [removed: $1.15] [added: $1.28] billion.

Our effective tax rate, which includes discrete tax items, was [removed: 12.8%] [added: 12.2%] in [removed: 2022] [added: 2023] compared with [removed: 12.9%] [added: 12.8%] in [removed: 2021.][added: 2022.]

Net income was [removed: $8.75] [added: $6.51] billion compared with [removed: $7.77] [added: $8.75] billion.

EPS was [removed: $9.41] [added: $7.07] compared with [removed: $8.26.][added: $9.41.]

Segment results – [removed: 2022] [added: 2023] compared with [removed: 2021][added: 2022]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | Change | | |

| Revenue | | | $ | [removed: 15,359] [added: 13,040] | | | | | $ | [removed: 14,050] [added: 15,359] | | | | | [removed: 9] [added: (15)] | | % |

| Operating profit | | | [removed: 8,359] [added: 5,821] | | | | | | [removed: 7,393] [added: 8,359] | | | | | | [removed: 13] [added: (30)] | | % |

| Operating profit % of revenue | | | [removed: 54.4] [added: 44.6] | | % | | | | [removed: 52.6] [added: 54.4] | | % | | | | | | |

Analog revenue [removed: increased] [added: decreased] in both product [removed: lines, led by Signal Chain.][added: lines about equally.]

Operating profit [removed: increased] [added: decreased] primarily due to [removed: higher] [added: lower] revenue and [removed: associated gross profit.][added: higher manufacturing costs.]

| Revenue | | | $ | [removed: 3,261] [added: 3,368] | | | | | $ | [removed: 3,049] [added: 3,261] | | | | | [removed: 7] [added: 3] | | % |

| Operating profit | | | [removed: 1,253] [added: 1,008] | | | | | | [removed: 1,174] [added: 1,253] | | | | | | [removed: 7] [added: (20)] | | % |

| Operating profit % of revenue | | | [removed: 38.4] [added: 29.9] | | % | | | | [removed: 38.5] [added: 38.4] | | % | | | | | | |

| Revenue | | | $ | [removed: 1,408] [added: 1,111] | | | | | $ | [removed: 1,245] [added: 1,408] | | | | | [removed: 13] [added: (21)] | | % |

| Operating profit * | | | [removed: 528] [added: 502] | | | | | | [removed: 393] [added: 528] | | | | | | [removed: 34] [added: (5)] | | % |

| Operating profit % of revenue | | | [removed: 37.5] [added: 45.2] | | % | | | | [removed: 31.6] [added: 37.5] | | % | | | | | | |

*Includes [removed: acquisition charges and] restructuring charges/other

Other revenue [removed: increased $163] [added: decreased $297] million, and operating profit [removed: increased $135] [added: decreased $26] million.

At the end of [removed: 2022,] [added: 2023,] total cash (cash and cash equivalents plus short-term investments) was [removed: $9.07] [added: $8.58] billion, a decrease of [removed: $672] [added: $492] million from the end of [removed: 2021.][added: 2022.]

Accounts receivable were [removed: $1.90] [added: $1.79] billion, [removed: an increase] [added: a decrease] of [removed: $194] [added: $108] million compared with the end of [removed: 2021.][added: 2022.]

Days sales outstanding at the end of [removed: 2022] [added: 2023] were [removed: 37] [added: 39] compared with [removed: 32] [added: 37] at the end of [removed: 2021.][added: 2022.]

Inventory was [removed: $2.76] [added: $4.00] billion, an increase of [removed: $847 million] [added: $1.24 billion] from the end of [removed: 2021.][added: 2022.]

Days of inventory at the end of [removed: 2022] [added: 2023] were [removed: 157] [added: 219] compared with [removed: 116] [added: 157] at the end of [removed: 2021.][added: 2022.]

As of December 31, [removed: 2022,] [added: 2023,] our credit facility was undrawn, and we had no commercial paper outstanding.

Cash flows from operating activities for [removed: 2022] [added: 2023] were [removed: $8.72] [added: $6.42] billion, a decrease of [removed: $36 million] [added: $2.30 billion] due to [added: lower net income and] higher cash used for working [removed: capital] [added: capital,] as we continued to strategically build [removed: our inventory, offset by higher net income.][added: inventory.]

Investing activities for [removed: 2022] [added: 2023] used [removed: $3.58] [added: $4.36] billion compared with [removed: $4.10] [added: $3.58] billion in [removed: 2021.][added: 2022.]

Capital expenditures were [removed: $2.80] [added: $5.07] billion compared with [removed: $2.46] [added: $2.80] billion in [removed: 2021] [added: 2022] and were primarily for semiconductor manufacturing equipment and facilities in both [removed: periods, including the purchase of our 300-mm semiconductor factory in Lehi, Utah, during 2021.][added: periods.]

Short-term investments [removed: used] [added: provided] cash [added: proceeds] of [removed: $826] [added: $682] million in [removed: 2022] [added: 2023] compared with [removed: $1.65 billion] [added: $826 million of cash used] in [removed: 2021.][added: 2022.]

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 [added: continue to] be higher than historical levels.

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.

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.

Gross 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.

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.

This decrease was due to lower income before income taxes.

| | | | 2023 | | | | | | 2022 | | | | | | Change | | |

Embedded Processing revenue increased due to the mix of products shipped.

Operating profit decreased primarily due to higher manufacturing costs, partially offset by higher revenue.

| | | | 2023 | | | | | | 2022 | | | | | | Change | | |

See Note 11 to the financial statements.

| | | | 2023 | | | | | | 2022 | | |

The coronavirus (COVID-19) pandemic and its effects are impacting and will likely continue to impact market conditions and business operations across industries worldwide, including at TI.

Therefore, we remain cautious about how the economy might behave for the next few years and continue to monitor potential impact on our operations.

After a sustained period of growth, a market correction began in 2022.

As a result, demand for our products weakened, and we expect this to continue into 2023.

During this time, we will continue to manage our operating plan and expenses with a steady hand as we focus on long-term investments to strengthen our competitive advantages.

Gross margin of 68.8% reflected the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-mm production.

During 2022, we invested $3.37 billion in R&D and SG&A, invested $2.80 billion in capital expenditures and returned $7.91 billion to shareholders through dividends and stock repurchases.

Revenue of $20.03 billion increased $1.68 billion, or 9.2%, due to higher revenue from Analog and, to a lesser extent, Embedded Processing.

This increase benefited from higher prices and the mix of products shipped.

Gross profit of $13.77 billion was up $1.40 billion, or 11.3%, primarily due to higher revenue.

Restructuring charges/other was $257 million compared with $54 million due to integration charges at our Lehi, Utah, manufacturing facility in both periods, which were partially offset by gains on sales of assets in 2021.

The charges associated with our Lehi facility transitioned to cost of revenue once production began in December 2022.

This increase was primarily due to higher income before income taxes and lower discrete tax benefits compared to 2021.

Embedded Processing revenue increased.

| | | | 2022 | | | | | | 2021 | | |

As part of our financial process, we must assess the likelihood that our deferred tax assets can be recovered.

If recovery is not likely, the provision for taxes must be increased by recording a reserve in the form of a valuation allowance for the deferred tax assets that are estimated not to be ultimately recoverable.

Our judgment regarding future recoverability of our deferred tax assets may change due to various factors, including changes in U.S. or international tax laws and changes in market conditions and their impact on our assessment of taxable income in future periods.

These changes, if any, may require adjustments to the valuation allowances and an accompanying reduction or increase in net income in the period when such determinations are made.

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 [removed: 2022] [added: 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 [removed: $3] [added: $4] million.

As of December 31, [removed: 2022,] [added: 2023,] we had forward currency exchange contracts outstanding with a notional value of [removed: $387] [added: $328] million to hedge net balance sheet exposures (including [removed: $118] [added: $102] million to sell Japanese yen, [removed: $78] [added: $77] million to sell British pounds and [removed: $49] [added: $58] million to buy Chinese yuan).

Similar hedging activities existed at year-end [removed: 2021.][added: 2022.]

As of December 31, [removed: 2022,] [added: 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 [removed: $15] [added: $22] million and decrease the fair value of our long-term debt by [removed: $566] [added: $891] million.

Long-term investments at year-end [removed: 2022] [added: 2023] include the following:

- *Equity investments* – includes [removed: non-marketable (non-publicly] [added: nonmarketable (nonpublicly] traded) equity securities.

[removed: Non-marketable] [added: 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.

In [removed: 2022,] [added: 2023,] we generated [removed: $20.03] [added: $17.52] billion of revenue.

As each generation [removed: became] [added: has become] more reliable, more affordable and lower in power, semiconductors [removed: were] [added: are] used by a growing number of customers and markets.

[removed: This] [added: Our] passion [removed: is] [added: continues to be] alive today as we help our customers develop electronics and new applications, particularly in industrial and automotive markets.

Over a 10-year period from [removed: 2013] [added: 2014] to [removed: 2022,] [added: 2023,] we allocated [removed: $87] [added: $94] billion, which reinforces the importance of discipline in capital allocation.

In this period, we allocated just over [removed: $10] [added: $15] billion to capital expenditures.

This is about getting our investments in the most impactful areas to maximize the growth of long-term free cash flow per share; it is not just about optimizing [removed: cost-cutting] [added: cost cutting] to get to the last dollar of expense.

Our Analog segment generated [removed: $15.36] [added: $13.04] billion of revenue in [removed: 2022.][added: 2023.]

Sales of our Analog products generated about [removed: 77%] [added: 74%] of our revenue in [removed: 2022.][added: 2023.]

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 [removed: controllers and converters,] [added: DC/DC switching regulators,] power switches, linear [added: and low-dropout] regulators, voltage references and lighting products.

Our Embedded Processing segment generated [removed: $3.26] [added: $3.37] billion of revenue in [removed: 2022.][added: 2023.]

An important characteristic of our Embedded Processing products is that our customers often invest their own [removed: research and development (R&D)] [added: R&D] to write software that operates on our products.

Sales of Embedded Processing products generated about [removed: 16%] [added: 19%] of our revenue in [removed: 2022.][added: 2023.]

Other generated [removed: $1.41] [added: $1.11] billion of revenue in [removed: 2022] [added: 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).

The table below lists the major markets for our products in [removed: 2022] [added: 2023] and the estimated percentage of our [removed: 2022] [added: 2023] revenue that the market represented.

| [removed: (25%] [added: (34%] of TI revenue) | | | | | | Hybrid, electric & powertrain systems | | |

| Personal electronics | | | | | | [removed: PC & notebooks] [added: Mobile phones] | | |

| [removed: (7%] [added: (5%] of TI revenue) | | | | | | Wired networking | | |

| [removed: (6%] [added: (4%] of TI revenue) | | | | | | Enterprise projectors | | |

As a result, in [removed: 2022] [added: 2023] about [removed: 70%] [added: 75%] of our revenue was direct, which includes TI.com, as customers valued the convenience of purchasing online.

Our new application programming interfaces (APIs) give customers the ability to directly access real-time [removed: inventory] 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.

We have focused on creating a competitive manufacturing structural cost advantage by investing in our advanced [removed: 300-mm] [added: 300mm] capacity.

An unpackaged chip built on a [removed: 300-mm] [added: 300mm] wafer costs about 40% less than an unpackaged chip built on a [removed: 200-mm] [added: 200mm] wafer.

We continue to invest to strengthen our competitive advantage in manufacturing and technology as part of our long-term capacity [removed: planning.][added: plan to meet demand over time.]

- [removed: starting] [added: Ramping] production in [removed: 300-mm] [added: 300mm] wafer fabrication facility RFAB2 [removed: (Richardson, Texas);][added: in Richardson, Texas.]

[removed: This North Texas site has the potential for four fabrication facilities to meet demand over time, as semiconductor] [added: Semiconductor] growth in electronics, particularly in industrial and automotive markets, is expected to continue well into the future.

In [removed: 2022,] [added: 2023,] we sourced about 80% of our total wafers and about [removed: 60%] [added: 65%] of our assembly/test production internally.

Our objectives for inventory are to maintain high levels of customer service, maintain [removed: stable] [added: dependable] and competitive lead times, minimize inventory obsolescence and improve manufacturing asset utilization.

| Ahmad S. Bahai | | | | | | [removed: 60] [added: 61] | | | | | | Senior Vice President | | |

| [removed: Kyle M. Flessner] [added: Mark S. Gary] | | | | | | [removed: 52] [added: 49] | | | | | | Senior Vice President | | |

| Mark [removed: S. Gary] [added: T. Roberts] | | | | | | 48 | | | | | | Senior Vice President | | |

| Haviv Ilan [removed: *] | | | | | | [removed: 54] [added: 55] | | | | | | Director, [removed: Executive Vice] President and Chief [removed: Operating] [added: Executive] Officer | | |

| Hagop H. Kozanian | | | | | | [removed: 40] [added: 41] | | | | | | Senior Vice President | | |

| Shanon J. Leonard | | | | | | [removed: 47] [added: 48] | | | | | | Senior Vice President | | |

| Rafael R. Lizardi | | | | | | [removed: 50] [added: 51] | | | | | | Senior Vice President and Chief Financial Officer | | |

| [removed: Mark T. Roberts] [added: Amichai Ron] | | | | | | [removed: 47] [added: 46] | | | | | | Senior Vice President | | |

| [removed: Amichai Ron] [added: Christine A. Witzsche] | | | | | | [removed: 45] [added: 39] | | | | | | Senior Vice President | | |

| Richard K. Templeton [removed: *] | | | | | | [removed: 64] [added: 65] | | | | | | [removed: Director,] [added: Director and] Chairman of the [removed: Board, President and Chief Executive Officer] [added: Board] | | |

| Cynthia Hoff Trochu | | | | | | [removed: 59] [added: 60] | | | | | | Senior Vice President, Secretary and General Counsel | | |

| [removed: Christine A. Witzsche] [added: Mohammad Yunus] | | | | | | [removed: 38] [added: 46] | | | | | | Senior Vice President | | |

[removed: Templeton, Ilan and] [added: Bahai, Ilan, Kozanian,] Lizardi and [added: Templeton and] Ms. Trochu have served as executive officers of the company for more than five years.

Our increased capital expenditures are to support future revenue growth, which will be a greater component of free cash flow per share growth going forward.

| (15% of TI revenue) | | | | | | PC & notebooks | | |

- 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.

We invest to reduce emissions over the long term in several ways, including installing new factory equipment with state-of-the-art emissions reduction technology, as well as retrofitting existing factory equipment with advanced abatement technology, in addition to using alternative gases and increasing the use of renewable electricity.

We also continue to implement practices such as recycling and reusing materials and properly handling hazardous and restricted substances.

Mr. Yunus became an executive officer in 2024.

Going forward, we expect increased capital expenditures to be the largest driver of free cash flow growth over the next 10 to 15 years.

| (20% of TI revenue) | | | | | | Mobile phones | | |

- starting production in 300-mm wafer fabrication facility LFAB (Lehi, Utah); and

- starting construction on our next two 300-mm wafer fabrication facilities in Sherman, Texas, SM1 and SM2.

SM1 production is expected to begin in 2025.

We invest to reduce emissions long-term by installing abatement devices, using alternative gases and expanding renewable energy, in addition to implementing practices such as recycling and reusing materials and properly handling hazardous and restricted substances.

As a result, we expect to increase our inventory levels over time.

*On January 19, 2023, Mr. Ilan was elected by the board of directors to succeed Mr. Templeton as president and chief executive officer, effective April 1, 2023.

Mr. Templeton will continue as chairman of the board.

Messrs.

Bahai, Flessner and Kozanian became executive officers of the company in 2018.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

The aggregate market value of voting stock held by non-affiliates of the Registrant was approximately [removed: $140,429,302,063] [added: $163,230,185,912] as of June 30, [removed: 2022.][added: 2023.]

[removed: 906,205,795] [added: 909,287,673] (Number of shares of common stock outstanding as of January [removed: 24, 2023)][added: 23, 2024)]

Part III hereof incorporates information by reference to the Registrant’s proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders.

Cybersecurity risk management and strategy

Our cybersecurity risk management is based on recognized cybersecurity industry frameworks and standards, including those of the National Institute of Standards and Technology, the Center for Internet Security Controls, and the International Organization for Standardization.

We use these frameworks, together with information collected from internal assessments, to develop policies for use of our information assets (for example, TI business information and information resources such as mobile phones, computers and workstations), access to specific intellectual property or technologies, and protection of personal information.

We protect these information assets through industry-standard techniques, such as multifactor authentication and malware defenses.

We also work with internal stakeholders across the company to integrate foundational cybersecurity principles throughout our organization’s operations, including employment of multiple layers of cybersecurity defenses, restricted access based on business need, and integrity of our business information.

Throughout the year, we also regularly train our employees on cybersecurity awareness, confidential information protection and simulated phishing attacks.

We regularly engage third-party assessors to conduct penetration testing and measure our program to industry standard frameworks.

We also have standing engagements with incident response experts and external counsel.

We frequently collaborate with industry experts and cybersecurity practitioners at other companies to exchange information about potential cybersecurity threats, best practices and trends.

Our cybersecurity risk management extends to risks associated with our use of third-party service providers.

For instance, we conduct risk and compliance assessments of third-party service providers that request access to our information assets.

Our cybersecurity risk management is an important part of our comprehensive business continuity program and enterprise risk management.

Our global information security team periodically engages with a cross-functional group of subject matter experts and leaders to assess and refine our cybersecurity risk posture and preparedness.

For example, we regularly evaluate and update contingency strategies for our business in the event that a portion of our information resources were to be unavailable due to a cybersecurity incident.

We practice our response to potential cybersecurity incidents through regular tabletop exercises, threat hunting and red team exercises.

For more information about cybersecurity risks, see the Risk factors discussion in Item 1A of this Form 10-K.

Governance of cybersecurity risk management

The board of directors, as a whole, has oversight responsibility for our strategic and operational risks.

The audit committee assists the board of directors with this responsibility by reviewing and discussing our risk assessment and risk management practices, including cybersecurity risks, with members of management.

The audit committee, in turn, periodically reports on its review with the board of directors.

Management is responsible for day-to-day assessment and management of cybersecurity risks.

Our chief information officer has primary oversight of material risks from cybersecurity threats.

Our chief information officer is the senior vice president responsible for the Information Technology Solutions (ITS) organization and for information protection.

Our chief information officer has more than 25 years of experience across various engineering, business and management roles, including serving as the vice president of the design and manufacturing ITS organization, leading the development and implementation of information technology strategies and roadmaps for manufacturing automation.

Our chief information security officer reports to our chief information officer.

Our chief information security officer has more than 15 years of experience working in information technology-related roles, a degree in Information Technology, and Global Information Assurance Certifications in Security Essentials (GSEC) as an Intrusion Analyst (GCIA) and as a Penetration Tester (GPEN).

Our chief information officer and chief information security officer assess our cybersecurity readiness through internal assessment tools as well as third-party control tests, vulnerability assessments, audits and evaluation against industry standards.

We have governance and compliance structures that are designed to elevate issues relating to cybersecurity to our chief information officer and chief information security officer, such as potential threats or vulnerabilities.

We also employ various defensive and continuous monitoring techniques using recognized industry frameworks and cybersecurity standards.

Our chief information officer meets with the audit committee periodically to review our information technology systems and discuss key cybersecurity risks.

In addition, the chief financial officer reviews with the audit committee at least annually our global enterprise risk management program, which includes cybersecurity risks, and is also reported to the board.

Our facilities in the United States contained approximately [removed: 15.9] [added: 16.1] million square feet at December 31, [removed: 2022,] [added: 2023,] of which approximately [removed: 0.3] [added: 0.4] million square feet were leased.

Our facilities outside the United States contained approximately [removed: 10.3] [added: 12.7] million square feet at December 31, [removed: 2022,] [added: 2023,] of which approximately [removed: 1.6] [added: 2.4] million square feet were leased.

At the end of [removed: 2022,] [added: 2023,] we occupied substantially all of the space in our facilities.

At December 31, [removed: 2022,] [added: 2023,] we had [removed: 11,694] [added: 11,261] stockholders of record.

The following table contains information regarding our purchases of our common stock during the fourth quarter of [removed: 2022.][added: 2023.]

(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, [removed: 2018] [added: 2018,] and September 15, 2022, respectively.

(b)In addition to open-market purchases, [removed: 12,798] [added: 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, [removed: 2022,] [added: 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.

| 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) | | |

| October 1, 2022 through October 31, 2022 | | | | | | 3,911,118 | | | | | | | | | $ | 155.52 | | | | | | | | 3,898,320 | | | | | | | | | $ | 21.65 | | billion | | |

| November 1, 2022 through November 30, 2022 | | | | | | 498,612 | | | | | | | | | 168.56 | | | | | | | | | 498,612 | | | | | | | | | 21.56 | | | billion | | |

| December 1, 2022 through December 31, 2022 | | | | | | 496,066 | | | | | | | | | 169.32 | | | | | | | | | 496,066 | | | | | | | | | 21.48 | | | billion | | |

| Total | | | | | | 4,905,796 | | | (b) | | | | | | $ | 158.24 | | (b) | | | | | | 4,892,998 | | | | | | | | | $ | 21.48 | | billion (c) | | |

- Income for each of the three years in the period ended December 31, [removed: 2022][added: 2023.]

- Comprehensive income for each of the three years in the period ended December 31, [removed: 2022][added: 2023.]

- Balance sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021][added: 2022.]

- Cash flows for each of the three years in the period ended December 31, [removed: 2022][added: 2023.]

- Stockholders’ equity for each of the three years in the period ended December 31, [removed: 2022][added: 2023.]

- Reports of independent registered public accounting firm (PCAOB ID: [removed: 42)][added: 42).]

| (In millions, except per-share amounts) | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Revenue | | | | | | $ | [removed: 20,028] [added: 17,519] | | | | | $ | [removed: 18,344] [added: 20,028] | | | | | $ | [removed: 14,461] [added: 18,344] | |

| Cost of revenue (COR) | | | | | | [removed: 6,257] [added: 6,500] | | | | | | [removed: 5,968] [added: 6,257] | | | | | | [removed: 5,192] [added: 5,968] | | |

| Gross profit | | | | | | [removed: 13,771] [added: 11,019] | | | | | | [removed: 12,376] [added: 13,771] | | | | | | [removed: 9,269] [added: 12,376] | | |

| Research and development (R&D) | | | | | | [removed: 1,670] [added: 1,863] | | | | | | [removed: 1,554] [added: 1,670] | | | | | | [removed: 1,530] [added: 1,554] | | |

| Selling, general and administrative (SG&A) | | | | | | [removed: 1,704] [added: 1,825] | | | | | | [removed: 1,666] [added: 1,704] | | | | | | [removed: 1,623] [added: 1,666] | | |

| Acquisition charges | | | | | | — | | | | | | [removed: 142] [added: —] | | | | | | [removed: 198] [added: 142] | | |

| Restructuring charges/other | | | | | | [removed: 257] [added: —] | | | | | | [removed: 54] [added: 257] | | | | | | [removed: 24] [added: 54] | | |

| Operating profit | | | | | | [removed: 10,140] [added: 7,331] | | | | | | [removed: 8,960] [added: 10,140] | | | | | | [removed: 5,894] [added: 8,960] | | |

| Other income (expense), net (OI&E) | | | | | | [removed: 106] [added: 440] | | | | | | [removed: 143] [added: 106] | | | | | | [removed: 313] [added: 143] | | |

| Interest and debt expense | | | | | | [removed: 214] [added: 353] | | | | | | [removed: 184] [added: 214] | | | | | | [removed: 190] [added: 184] | | |

| Income before income taxes | | | | | | [removed: 10,032] [added: 7,418] | | | | | | [removed: 8,919] [added: 10,032] | | | | | | [removed: 6,017] [added: 8,919] | | |

| Provision for income taxes | | | | | | [removed: 1,283] [added: 908] | | | | | | [removed: 1,150] [added: 1,283] | | | | | | [removed: 422] [added: 1,150] | | |

| Net income | | | | | | $ | [removed: 8,749] [added: 6,510] | | | | | $ | [removed: 7,769] [added: 8,749] | | | | | $ | [removed: 5,595] [added: 7,769] | |

| Basic | | | | | | $ | [removed: 9.51] [added: 7.13] | | | | | $ | [removed: 8.38] [added: 9.51] | | | | | $ | [removed: 6.05] [added: 8.38] | |

| Diluted | | | | | | $ | [removed: 9.41] [added: 7.07] | | | | | $ | [removed: 8.26] [added: 9.41] | | | | | $ | [removed: 5.97] [added: 8.26] | |

| Basic | | | | | | [removed: 916] [added: 908] | | | | | | [removed: 923] [added: 916] | | | | | | [removed: 921] [added: 923] | | |

| Diluted | | | | | | [removed: 926] [added: 916] | | | | | | [removed: 936] [added: 926] | | | | | | [removed: 933] [added: 936] | | |

| Income allocated to RSUs | | | | | | [removed: (39)] [added: (33)] | | | | | | [removed: (33)] [added: (39)] | | | | | | [removed: (27)] [added: (33)] | | |

| Income allocated to common stock for diluted EPS | | | | | | $ | [removed: 8,710] [added: 6,477] | | | | | $ | [removed: 7,736] [added: 8,710] | | | | | $ | [removed: 5,568] [added: 7,736] | |

| (In millions) | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Adjustments, net of tax effect of [removed: $48, ($56)] [added: ($9), $48] and [removed: $3] [added: ($56)] | | | | | | [removed: (155)] [added: 27] | | | | | | [removed: 175] [added: (155)] | | | | | | [removed: (41)] [added: 175] | | |

| Recognized within net income, net of tax effect of [removed: ($17), ($8)] [added: ($5), ($17)] and [removed: ($9)] [added: ($8)] | | | | | | [removed: 61] [added: 15] | | | | | | [removed: 29] [added: 61] | | | | | | 29 | | |

| Prior service cost [added: (credit)] of defined benefit plans: | | | | | | | | | | | | | | | | | | | | |

| Recognized within net income, net of tax effect of $0, $0 and $0 | | | | | | [removed: (1)] [added: 1] | | | | | | (1) | | | | | | (1) | | |

| Change in fair value, net of tax effect of $0, $0 and $0 | | | | | | 1 | | | | | | [removed: —] [added: 1] | | | | | | — | | |

| Unrealized [removed: losses,] [added: gains (losses),] net of tax effect of [removed: $1, $0] [added: ($1), $1] and $0 | | | | | | [removed: (3)] [added: 5] | | | | | | [removed: —] [added: (3)] | | | | | | — | | |

| Other comprehensive income (loss), net of taxes | | | | | | [removed: (97)] [added: 49] | | | | | | [removed: 203] [added: (97)] | | | | | | [removed: (13)] [added: 203] | | |

| Total comprehensive income | | | | | | $ | [removed: 8,652] [added: 6,559] | | | | | $ | [removed: 7,972] [added: 8,652] | | | | | $ | [removed: 5,582] [added: 7,972] | |

| (In millions, except par value) | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Cash and cash equivalents | | | | | | $ | [removed: 3,050] [added: 2,964] | | | | | $ | [removed: 4,631] [added: 3,050] | |

| Short-term investments | | | | | | [removed: 6,017] [added: 5,611] | | | | | | [removed: 5,108] [added: 6,017] | | |

| Accounts receivable, net of allowances of [removed: ($13)] [added: ($16)] and [removed: ($8)] [added: ($13)] | | | | | | [removed: 1,895] [added: 1,787] | | | | | | [removed: 1,701] [added: 1,895] | | |

| Raw materials | | | | | | [removed: 353] [added: 420] | | | | | | [removed: 245] [added: 353] | | |

| (In millions) | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| Net income | | | | | | $ | 6,510 | | | | | $ | 8,749 | | | | | $ | 7,769 | |

| Net income | | | | | | — | | | | | | — | | | | | | 6,510 | | | | | | — | | | | | | — | | |

| Balance, December 31, 2023 | | | | | | $ | 1,741 | | | | | $ | 3,362 | | | | | $ | 52,283 | | | | | $ | (40,284) | | | | | $ | (205) | |

| | | | 2023 | | | | | | 2022 | | |

| Net income | | | $ | 6,510 | | | | | | | | | | | | | | | | | $ | 8,749 | | | | | | | | | | | | | | | | | $ | 7,769 | | | | | | | | | | | | | |

| Net income | | | $ | 6,510 | | | | | | | | | | | | | | | | | $ | 8,749 | | | | | | | | | | | | | | | | | $ | 7,769 | | | | | | | | | | | | | |

The receivables are comprised of $497 million in prepaid expenses and other current assets and $859 million in other long-term assets.

In 2023, cost of revenue benefited by $45 million from the investment tax credit, recognized as a reduction of depreciation expense.

See Note 11 for additional information.

| R&D | | | 119 | | | | | | 90 | | | | | | 67 | | |

| Granted | | | 4 | | | | | | $ | 173.90 | | | | | 2 | | | | | | $ | 172.59 | |

| Outstanding grants, December 31, 2023 (a) | | | 26 | | | | | | $ | 119.60 | | | | | 5 | | | | | | $ | 161.40 | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| | | | 2023 | | | | | | | | | | | | | | | | | | 2022 | | | | | | | | | | | | | | | | | | 2021 | | | | | | | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| | | | 2023 | | | | | | 2022 | | |

| | | | 2023 | | | | | | 2022 | | |

| Net deferred tax asset | | | $ | 694 | | | | | $ | 407 | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| Nonmarketable investments | | | — | | | | | | — | | | | | | 5 | | | | | | — | | | | | | — | | | | | | 5 | | |

| | | | December 31, 2023 | | | | | | | | | | | | | | | | | | December 31, 2022 | | | | | | | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | |

| Participant contributions | | | — | | | | | | — | | | | | | 14 | | | | | | 15 | | | | | | 1 | | | | | | 5 | | |

| Benefits paid | | | (13) | | | | | | (12) | | | | | | (41) | | | | | | (41) | | | | | | (77) | | | | | | (86) | | |

| Settlements | | | (40) | | | | | | (309) | | | | | | — | | | | | | — | | | | | | (6) | | | | | | (91) | | |

| Other | | | — | | | | | | — | | | | | | (19) | | | | | | — | | | | | | — | | | | | | — | | |

| 2023 | | | | | | | | | | | | | | | | | | | | | | | |

| Funded status at end of 2023 | | | $ | (87) | | | | | $ | 6 | | | | | $ | 134 | | | | | $ | 53 | |

| Adjustments | | | (23) | | | | | | (17) | | | | | | — | | | | | | 4 | | | | | | — | | | | | | (36) | | | | | | — | | |

| | | | December 31, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | 418 | | | | | $ | 418 | |

| Total | | | $ | 4 | | | | | $ | — | | | | | | | | | | | $ | 260 | | | | | $ | 264 | |

| Equity securities | | | 57 | | | | | | 1 | | | | | | | | | | | | 364 | | | | | | 422 | | |

| Total | | | $ | 106 | | | | | $ | 53 | | | | | | | | | | | $ | 1,707 | | | | | $ | 1,866 | |

| | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | |

| Discount rate | | | 5.20% | | | | | | 5.67% | | | | | | 5.17% | | | | | | 5.68% | | | | | | 3.28% | | | | | | 3.45% | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | |

| | | | 2023 | | | | | | 2022 | | |

| Balance, December 31, 2019 | | | | | | $ | 1,741 | | | | | $ | 2,110 | | | | | $ | 39,898 | | | | | $ | (34,495) | | | | | $ | (347) | |

| 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

The following geographic information is based on product shipment destination, which does not reflect end demand by geography.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | For Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| United States | | | $ | 2,267 | | | | | 11 | | % | | | | $ | 1,906 | | | | | 10 | | % | | | | $ | 1,547 | | | | | 11 | | % |

| China (a) | | | 9,844 | | | | | | 49 | | | | | | 9,998 | | | | | | 55 | | | | | | 7,881 | | | | | | 54 | | |

| Rest of Asia | | | 2,633 | | | | | | 13 | | | | | | 2,187 | | | | | | 12 | | | | | | 1,660 | | | | | | 11 | | |

| Japan | | | 1,172 | | | | | | 6 | | | | | | 959 | | | | | | 5 | | | | | | 734 | | | | | | 5 | | |

(a)Revenue from products shipped into China includes shipments to customers that manufacture in China and then export end products to their customers around the world, as well as distributors that transship inventory through China to service other countries.

| Europe, Middle East and Africa | | | 44 | | | | | | 47 | | |

| Rest of world | | | 33 | | | | | | 15 | | |

One of our end customers accounted for 8%, 9% and 10% of revenue in 2022, 2021 and 2020, respectively, recognized primarily in our Analog segment.

| R&D | | | 90 | | | | | | 67 | | | | | | 68 | | |

| Outstanding grants, December 31, 2021 | | | 25 | | | | | | $ | 91.58 | | | | | 4 | | | | | | $ | 124.80 | |

| Granted | | | 4 | | | | | | $ | 174.60 | | | | | 2 | | | | | | $ | 174.39 | |

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act, which introduces a new 15% corporate minimum tax based on adjusted financial statement income effective January 1, 2023, and provisions intended to mitigate climate change, including tax credit incentives for investments that reduce greenhouse gas emissions.

Based on our current analysis of the provisions, this legislation will not have a material impact on our consolidated financial statements.

| Retirement costs for defined benefit and retiree health care | | | — | | | | | | (15) | | |

Reductions for tax positions of prior years in 2020 include a $249 million tax benefit for the effective settlement of a depreciation-related uncertain tax position.

Accrued interest of $46 million related to this uncertain tax position was reversed and included in OI&E.

| Non-marketable investments | | | — | | | | | | — | | | | | | 5 | | | | | | — | | | | | | — | | | | | | 4 | | |

In 2020, we entered into total return swaps to economically hedge the variability of certain deferred compensation obligations to employees.

As a result, in 2020, we received proceeds of $253 million from the sale of investments in mutual funds that were previously being utilized to offset this exposure.

| 2021 | | | | | | | | | | | | | | | | | | | | | | | |

| Funded status at end of 2021 | | | $ | 39 | | | | | $ | 25 | | | | | $ | 239 | | | | | $ | 303 | |

| Adjustments | | | 137 | | | | | | 18 | | | | | | — | | | | | | 48 | | | | | | — | | | | | | 203 | | | | | | — | | |

| Total | | | $ | 10 | | | | | $ | — | | | | | | | | | | | $ | 375 | | | | | $ | 385 | |

| Equity securities | | | 49 | | | | | | 2 | | | | | | | | | | | | 542 | | | | | | 593 | | |

| Total | | | $ | 120 | | | | | $ | 106 | | | | | | | | | | | $ | 2,587 | | | | | $ | 2,813 | |

| Discount rate | | | 3.82% | | | | | | 2.95% | | | | | | 3.05% | | | | | | 2.74% | | | | | | 1.57% | | | | | | 1.31% | | |

In March 2020, we issued a principal amount of $750 million of fixed-rate, long-term debt due in 2025.

In May 2020, we issued a principal amount of $750 million of fixed-rate, long-term debt due in 2030.

| Notes due 2023 at 2.25% | | | 500 | | | | | | 500 | | |

Capitalized interest was not material.

| Lease payments | | | $ | 81 | | | | | $ | 65 | | | | | $ | 54 | | | | | $ | 48 | | | | | $ | 41 | | | | | $ | 185 | | | | | $ | 474 | |

| Purchase commitments | | | $ | 502 | | | | | $ | 529 | | | | | $ | 260 | | | | | $ | 236 | | | | | $ | 242 | | | | | $ | 337 | | | | | $ | 2,106 | |

| Restructuring charges/other | | | $ | 257 | | | | | $ | 54 | | | | | $ | 24 | |

Internal control over financial [removed: reporting][added: reporting]

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the fourth quarter of [removed: 2022] [added: 2023] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

TI management assessed the effectiveness of internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Based on our assessment, we believe that, as of December 31, [removed: 2022,] [added: 2023,] our internal control over financial reporting is effective based on the COSO criteria.

We have audited Texas Instruments Incorporated’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Texas Instruments Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes, and our report dated February [removed: 3, 2023,] [added: 2, 2024,] expressed an unqualified opinion thereon.

February 2, 2024

February 3, 2023

Not applicable.

Section 13(r) of the Securities Exchange Act of 1934 disclosure

During the first quarter of 2022 and as set forth in General License 1B from the U.S. Office of Foreign Assets Control, we periodically filed notifications with the Russian Federal Security Service (FSB) solely to permit the import, distribution and use of certain of our catalog semiconductor products in Russia.

No gross revenue or net profit was directly attributable to these notifications to the FSB, and we do not intend to continue such notifications.

In February 2022, we decided to no longer sell any products in Russia or Belarus.

The information with respect to directors’ names, ages, positions, term of office, periods of service and business experience, which is contained under the caption “Election of directors” in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders, is incorporated herein by reference to such proxy statement.

The information contained under the caption “Committees of the board” with respect to the audit committee and the audit committee financial expert in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

The information contained under the captions “Director compensation” and “Executive compensation” in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders is incorporated herein by reference to such proxy statement, provided that the Compensation Committee report shall not be deemed filed with this Form 10-K.

The information contained under the caption “Compensation committee interlocks and insider participation” in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

The following table sets forth information about the company’s equity compensation plans as of December 31, [removed: 2022.][added: 2023.]

| Plan Category | | | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | | | | | | | | | [removed: Weighted-Average] [added: Weighted Average] Exercise Price of Outstanding Options, Warrants and Rights (2) | | | | | | | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (1)) (3) | | | | | |

Accordingly, such units have been excluded for purposes of computing the [removed: weighted-average] [added: weighted average] exercise price.

[removed: 30,239,773] [added: 25,296,767] shares remain available for future issuance under the 2009 LTIP and [removed: 1,809,242] [added: 1,786,785] shares remain available for future issuance under the 2018 Director Plan.

(d)Includes [removed: 25,204,866] [added: 25,771,272] shares for issuance upon exercise of outstanding grants of options, [removed: 4,876,407] [added: 5,220,883] shares for issuance upon vesting of outstanding grants of restricted stock units, [removed: 155,301] [added: 166,526] shares for issuance under the 2014 ESPP and [removed: 95,694] [added: 98,940] shares for issuance in settlement of directors’ deferred compensation accounts.

The information that is contained under the captions “Security ownership of certain beneficial owners” and “Security ownership of directors and management” in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

| Equity compensation plans approved by security holders | | | | | | 31,257,621 | | | (a) | | | | | | $ | 119.76 | | (b) | | | | | | 58,452,628 | | | (c) | | |

| Total | | | | | | 31,257,621 | | | (d) | | | | | | $ | 119.76 | | | | | | | | 58,452,628 | | | | | |

| Equity compensation plans approved by security holders | | | | | | 30,332,268 | | | (a) | | | | | | $ | 105.95 | | (b) | | | | | | 64,051,555 | | | (c) | | |

| Total | | | | | | 30,332,268 | | | (d) | | | | | | $ | 105.95 | | | | | | | | 64,051,555 | | | | | |

The information contained under the captions “Related person transactions” and “Director independence” in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

The information with respect to principal accountant fees and services contained under the caption “Proposal to ratify appointment of independent registered public accounting firm” in our proxy statement for the [removed: 2023] [added: 2024] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

| 4(b) | | | [removed: [Officer’s Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312513206195/d533359dex42.htm)] [added: [Officers’ Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517158011/d582525dex41.htm)] | | | 8-K | | | 001-3761 | | | May [removed: 8, 2013] [added: 4, 2017] | | | [removed: 4.2] [added: 4.1] | | | | | |

| [removed: 4(c)] [added: 4(f)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312514094885/d691140dex42.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519070297/d713107dex41.htm)] | | | 8-K | | | 001-3761 | | | March [removed: 12, 2014] [added: 11, 2019] | | | [removed: 4.2] [added: 4.1] | | | | | |

| 4(d) | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312516581435/d194090dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518154669/d579571dex41.htm)] | | | 8-K | | | 001-3761 | | | May [removed: 6, 2016] [added: 7, 2018] | | | 4.1 | | | | | |

| [removed: 4(e)] [added: 4(c)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517158011/d582525dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517332507/d482992dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: May 4,] [added: November 3,] 2017 | | | 4.1 | | | | | |

| [removed: 4(f)] [added: 4(e)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517332507/d482992dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518187735/d603255dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: November 3, 2017] [added: June 8, 2018] | | | 4.1 | | | | | |

| [removed: 4(g)] [added: 4(i)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518154669/d579571dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000156459020020837/txn-ex41_7.htm)] | | | 8-K | | | 001-3761 | | | May [removed: 7, 2018] [added: 4, 2020] | | | 4.1 | | | | | |

| [removed: 4(h)] [added: 4(g)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518187735/d603255dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519237540/d783480dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: June 8, 2018] [added: September 4, 2019] | | | 4.1 | | | | | |

| [removed: 4(i)] [added: 4(h)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519070297/d713107dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312520071568/d883949dex41.htm)] | | | 8-K | | | 001-3761 | | | March [removed: 11, 2019] [added: 12, 2020] | | | 4.1 | | | | | |

| 4(j) | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519237540/d783480dex41.htm)] [added: Certificate](https://www.sec.gov/Archives/edgar/data/0000097476/000119312521273955/d226154dex41.htm)] | | | 8-K | | | 001-3761 | | | September [removed: 4, 2019] [added: 15, 2021] | | | 4.1 | | | | | |

| [removed: 4(k)] [added: 4(m)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312520071568/d883949dex41.htm)] [added: Certificate](https://www.sec.gov/Archives/edgar/data/97476/000119312523070157/d443336dex41.htm)] | | | 8-K | | | 001-3761 | | | March [removed: 12, 2020] [added: 14, 2023] | | | 4.1 | | | | | |

| [removed: 4(l)] [added: 4(n)] | | | [Officers’ [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000156459020020837/txn-ex41_7.htm)] [added: Certificate](https://www.sec.gov/Archives/edgar/data/97476/000119312523148183/d468248dex41.htm)] | | | 8-K | | | 001-3761 | | | May [removed: 4, 2020] [added: 18, 2023] | | | 4.1 | | | | | |

| [removed: 4(m)] [added: 4(k)] | | | [Officers’ [removed: Certificate](https://www.sec.gov/Archives/edgar/data/0000097476/000119312521273955/d226154dex41.htm)] [added: Certificate](https://www.sec.gov/Archives/edgar/data/97476/000119312522222326/d393354dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: September 15, 2021] [added: August 16, 2022] | | | 4.1 | | | | | |

| [removed: 4(n)] [added: 4(l)] | | | [Officers’ [removed: Certificate](https://www.sec.gov/Archives/edgar/data/97476/000119312522222326/d393354dex41.htm)] [added: Certificate](https://www.sec.gov/Archives/edgar/data/97476/000119312522288982/d105858dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: August 16,] [added: November 18,] 2022 | | | 4.1 | | | | | |

| [removed: 4(p)] [added: 4(o)] | | | [Description of Securities](http://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex4l.htm) | | | 10-K | | | 001-3761 | | | February 20, 2020 | | | 4(l) | | | | | |

| 21 | | | [List of Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000009747623000007/q42022txnex21.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex21.htm)] | | | | | | | | | | | | | | | X | | |

| 23 | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/97476/000009747623000007/q42022txnex23.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex23.htm)] | | | | | | | | | | | | | | | X | | |

| 31(a) | | | [Rule [removed: 13a-14(aRule] 13a-14(a)/15(d)-14(a) Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747623000007/q42022txnex31a.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex31a.htm)] | | | | | | | | | | | | | | | X | | |

| 31(b) | | | [Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747623000007/q42022txnex31b.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex31b.htm)] | | | | | | | | | | | | | | | X | | |

| 32(a) | | | [Section 1350 Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747623000007/q42022txnex32a.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex32a.htm)] | | | | | | | | | | | | | | | X | | |

| 32(b) | | | [Section 1350 Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747623000007/q42022txnex32b.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex32b.htm)] | | | | | | | | | | | | | | | X | | |

Date: February [removed: 3, 2023][added: 2, 2024]

Each person whose signature appears below constitutes and appoints each of [removed: Richard K.][added: Haviv Ilan, Rafael R.]

Knecht and Cynthia Hoff Trochu, or any of them, each acting alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities in connection with the annual report on Form 10-K of Texas Instruments Incorporated for the year ended December 31, [removed: 2022,] [added: 2023,] to sign any and all amendments to the Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of the [removed: 3rd] [added: 2nd] day of February [removed: 2023.][added: 2024.]

| Martin S. Craighead, Director | | | | | | [removed: Jean M. Hobby,] [added: Curtis C. Farmer,] Director | | |

| [removed: Michael D. Hsu,] [added: Richard K. Templeton,] Director [added: and Chairman of the Board] | | | | | | Haviv Ilan, Director, [removed: Executive Vice] President and Chief [removed: Operating] [added: Executive] Officer | | |

| [removed: Ronald Kirk,] [added: Jean M. Hobby,] Director | | | | | | [removed: Pamela H. Patsley,] [added: Ronald Kirk,] Director | | |

| 10(k) | | | [Form of Non-Qualified Stock Option Award Agreement for](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm) [Exec](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm)[utive](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm) [Officers](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm) [effe](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm)[ctive as of January 18, 2024](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm)[*](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10k.htm) | | | | | | | | | | | | | | | X | | |

| 10(l) | | | [Form of Restricted Stock Unit Award Agreement for](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm) [Exe](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm)[c](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm)[utive](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm) [Officers](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm) [effective as of January](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm) [18, 2024](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm)[*](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex10l.htm) | | | | | | | | | | | | | | | X | | |

| | | | | | | | | | | | | | | | | | | | | |

| 97 | | | [Texas Instruments Incorporated Recoupment Policy](https://www.sec.gov/Archives/edgar/data/97476/000009747624000007/q42023txnex97.htm) | | | | | | | | | | | | | | | X | | |

| /s/ Martin S. Craighead | | | | | | /s/ Curtis C. Farmer | | |

| /s/ Jean M. Hobby | | | | | | /s/ Ronald Kirk | | |

| /s/ Pamela H. Patsley | | | | | | /s/ Robert E. Sanchez | | |

| Pamela H. Patsley, Director | | | | | | Robert E. Sanchez, Director | | |

| /s/ Richard K. Templeton | | | | | | /s/ Haviv Ilan | | |

| 4(o) | | | [Officers’ Certificate](https://www.sec.gov/Archives/edgar/data/97476/000119312522288982/d105858dex41.htm) | | | 8-K | | | 001-3761 | | | November 18, 2022 | | | 4.1 | | | | | |

- The duration and scope of the COVID-19 pandemic, government and other third-party responses to it and the consequences for the global economy, including to our business and the businesses of our suppliers, customers and distributors;

Templeton, Rafael R.

| /s/ Martin S. Craighead | | | | | | /s/ Jean M. Hobby | | |

| /s/ Michael D. Hsu | | | | | | /s/ Haviv Ilan | | |

| /s/ Ronald Kirk | | | | | | /s/ Pamela H. Patsley | | |

| /s/ Robert E. Sanchez | | | | | | /s/ Richard K. Templeton | | |

| Robert E. Sanchez, Director | | | | | | Richard K. Templeton, Director, Chairman of the Board, President and Chief Executive Officer | | |