First to the auditorium. Thank you. Chairman?
Joe, thanks. Good morning, everybody. The 2011 annual meeting of stockholders of Texas Instruments Incorporated is hereby called to order. I'm Richard Templeton, the Chairman, President, Chief Executive Officer, and it's my pleasure to welcome everybody to today's meeting. First on our agenda today is the election of directors, followed by the consideration of three proposals: an advisory vote on executive compensation, or as it is more commonly known, say-on-pay, an advisory vote on the frequency of say-on-pay votes, and the ratification of independent auditors. While the polls are open for voting on the directors in these proposals, I will review our strategic direction. The secretary's report on the voting will then follow, after which questions or comments from the floor will be in order. If you would, please hold your questions or comments until that time, as they may be covered during the course of the meeting.
Before we begin, I want to introduce some special guests who are with us today. First, Margaret McDermott and Mary McDermott Cook. Margaret is the wife, and Mary is the daughter of TI Founder Eugene McDermott. We're also pleased to have Tom Engibous, former TI Chairman, President and CEO. Tom, would you please stand? We're also pleased to have former President, CEO, and Director of TI, Fred Bucy. Fred, would you please stand? Finally, Hallie Harris, wife of former TI Director Buddy Harris. Hallie, would you please stand? Joseph Hubach, secretary of the company, will act as the secretary of this meeting. The Board of Directors has appointed an independent inspector to conduct the vote at this meeting. Joe has advised me that holders of more than 85% of the outstanding common stock are represented at the meeting by proxy or in person. This constitutes a quorum.
At this time, I'm pleased to introduce the nominees for election to the TI Board. All except Robert Sanchez were elected at last year's annual meeting. As I introduce the nominees, I ask that they stand and remain standing. Robert Sanchez is new to our Board, so I'll take just a moment to tell you about him. Robert joined Ryder System, Inc. in 1993. He served Ryder as Executive Vice President of Operations of U.S., Fleet Management Solutions and as Executive Vice President and Chief Financial Officer and Chief Information Officer. In 2010, he became President of Global Fleet Management Solutions at Ryder. Robert's breadth of experience in finance and management, along with his background in multinational operations and market, make him a valuable addition to the TI Board. Robert will serve on the Audit Committee.
In addition to Robert and myself, the nominees are Ralph Babb. Raph please stand, Dan Carp, Carrie Cox, Steve McMillen, Pam Patsley, Wayne Sanders, Ruth Simmons, and Christie Whitman. All of these nominees and their qualifications as directors are listed in our proxy statement. TI bylaws require advance notice of proposed nominations. Since no notice of other nominations has been submitted in accordance with the bylaws, the nominations are closed. Thank you. Now, before we move on to the proposals, I would like to take just a moment to recognize two of our directors who are not standing for reelection this year. David Boren and David Goode have reached the retirement age called for in TI's bylaws. Both have been outstanding directors. David Boren joined the Board in 1995. During his years of service on the Board, David has been a member of every Board committee.
He served as the Chair of the Governance and Stockholders Relations Committee, where he brought a clear vision of the Board's role in an ever-changing governance environment. His experience in government and academia, which included service as a governor, U.S. Senator, and University President, was a great asset in guiding a worldwide company that is affected by worldwide issues. His unique insights, dedication of the highest ethical standards, and strong sense of accountability will have a lasting effect on the success and growth in the future of the company. David Goode joined the Board in 1996. He, too, has served as a member on every Board committee. He served as the Chair of the Compensation Committee, where he brought sound judgment to the Board's compensation decisions in a time of increasing focus on executive compensation.
His exceptional business acumen, experience as the CEO of a major corporation, and strong record as a community leader were great assets as we guided the company through important changes in its strategic direction. David's commitment to the highest ethical standards and his always wise and thoughtful counsel have been instrumental in putting our company on a path forward. David and David, would you please stand? We'll now consider the three Board proposals. The Board of Directors recommends the stockholders cast an advisory vote for the proposal approving executive compensation for 2010, as disclosed in our proxy statement. It recommends a vote for a frequency of every three years for future votes on executive compensation. The Board of Directors also recommends that stockholders ratify the appointment of Ernst & Young as the company's independent registered public accounting firm for 2011.
The text and related discussion of the Board proposals are in our proxy statement, so I won't take additional time to describe the proposals. This would be an appropriate time for comment on the nominations and the Board proposals. Please limit yourselves or your comments to a total of three minutes. We will now open the polls and take the vote on the election of directors and the Board proposals. The polls will remain open for 10 minutes. While the polls are open, I'd like to take a few minutes to cover the strategic direction of the company. When history, I believe, is written about 2010, I think it's going to be a year that will be remembered as a milestone year. Because after several years of strategic transformation and a promise of what was to come, this was the year we began to deliver on our potential.
Our potential for growth, our potential for market share gains, and ultimately, our potential for what a business model like ours can do for shareholders over the long term. The results in 2010 are compelling, not only for their absolute numbers but for how they were delivered. We didn't cherry-pick these results. They were solid. They were consistent. They were across all our businesses. Let's take a closer look. Like any story, let's start at the beginning. Back in 2006, we began the strategic journey in earnest. We were a company that about half our revenue came from our core businesses of analog, embedded processing, and the part of wireless then focused only on smartphones. By the end of 2010, that revenue percentage had gone from 52% to 67%. Moving forward, it will only get bigger, as we're focusing 90% of our research and development on these core areas.
Of course, our recent decision to acquire National Semiconductor as an analog company will accelerate that strategy even more. During the four years between 2006 and 2010, we increased our investment in areas that we thought would fuel future growth, and we starved other areas, some of which had been very good to us in the past but which no longer had the growth potential. Dollars were diverted, programs were terminated, but new opportunities were nurtured. Because of this focus, we've taken TI to a new place. For example, during these years of transformation, we reduced baseband research and development to nearly zero, while investments in our OMAP application processors and connectivity products grew. The latter represents $1.3 billion in annual revenue, with great growth opportunity ahead as people integrate smartphones, tablets, and other portable devices into their lives.
Likewise, we tripled the number of microcontroller products over the last three years. In 2010 alone, we launched nearly 400 new microcontrollers. Today, our transformation is essentially complete. In 2010, we were able to show solid strategic results, the most fundamental of which was growth. We grew revenue as a company 34% year- over- year. Each of our core businesses grew more than 40%. Analog grew 42%, with each one of its three product lines contributing. Embedded processing grew 41% as microcontroller growth teamed up with solid DSP growth. In wireless, OMAP and connectivity products were up just over 40%. Not only did we grow, but we gained share. I believe it is long-term share gain that is the true test of whether we're innovating and delivering products that matter to our customers.
I'm pleased to tell you that growth of our core businesses was substantially better, more than 15 percentage points better than the market average. The share gain in our core businesses was not a one-time event in 2010. Since the last economic peak for semiconductors, which occurred in the third quarter of 2008, our core businesses have collectively outgrown the market by 17 percentage points. We also gained share in each of our major geographic areas: North America, Europe, Japan, and Asia, including China. Just two weeks ago, we took an important step in investing for future growth with the announcement of our plans to acquire National Semiconductor. National is a company that, frankly, has declined in revenue the last few years. It has great people. It has great products. We believe we can unlock its growth by putting those products into the hands of our sales force.
Ultimately, we believe that not only can we grow national, we can grow it at rates well above the market average. Most telling to our strategy is the fact that when the National transaction closes, analog alone will become almost half of TI's overall revenue. We believe that is a very good thing. We also know results cannot be single-faceted. Good growth must come with good profitability. I can say on that front that, again, we delivered in 2010. Our operating profits hit a new record of $4.5 billion, worth 32% operating margin. We believe our business model should be able to grow, should be able to generate significant cash, so that even after investing for growth, we're able to return substantial amounts directly to our shareholders. In 2010, we generated $3.8 billion in cash from operations.
We repurchased $2.5 billion of TI stock during the year, and we reduced our outstanding shares by 6%. We increased our quarterly dividend rate by 8%. This was the eighth increase in seven years. Just as our focus is on growth, we're also making sure we've got the manufacturing capacity in place to support that growth. While other companies were shuttering manufacturing plants in the uncertain economic climate of the past couple of years, we used our strong balance sheet to purchase new capacity at a fraction of its original cost. With discounted purchases, we were able to equip, begin production, and generate revenue from the world's first 300-millimeter analog wafer fab right here in Texas. We opened our first wafer fab in China, and we added a new wafer fab in Japan.
In total, these investments will support more than $5 billion of additional revenue on an annual basis, helping us meet the growing customer demand around the world. Importantly, all three of these fabs were generating revenue for TI by year-end without overburdening our depreciation rate. No business is without challenges, and we're currently working through one that has taken an absolute heartbreaking toll on the country and the people of Japan. We have three sites that were directly impacted by the earthquake last month. Our Tokyo office was able to resume normal operations within hours, though occasionally interrupted by electrical blackouts. Our factories in Miho and Aizu, in the northeastern part of Japan, were more severely impacted, and wafer production at full was stopped. The damage to equipment and work in process was not modest.
Indeed, our team in Miho felt it appropriate to adopt the Phoenix as a symbol to their recovery. True to form, TIers went to work immediately to set operations back on a normal course. Literally within minutes of the earthquake, our employees in Miho and Aizu have shown such incredible strength and determination through all this, began to assess the damage and began formulating recovery plans. Within 24 hours, teams from other TI sites, including Hiji, Dallas, and Malaysia, were there with helping hands and spare parts, as well as food, water, and gasoline. Within 48 hours, all TI Japan employees were found to be safe and accounted for, and for that, we are very grateful. Within 72 hours, we were able to give our customers and our shareholders insight to the extent of the damage, and we had an estimated recovery schedule.
Within two weeks, we had identified alternate manufacturing sites for more than 80% of the work in process at the time of the quake. Within three weeks, TIers all over the world had donated more than $250,000 to the people of Japan to help with the earthquake and the tsunami relief, and the TI Foundation matched it. I am proud to tell you that the initial milestones that were first set forth in those early hours after the earthquake are being met. Miho is now starting 350 wafers a day and should be back to full production strength in mid-July. Aizu returns to full production in the next few days. I've seen many pictures from Miho and Aizu, and while I can't see the faces behind the cleanroom masks, you can tell these are smiling eyes as we celebrate the recovery milestones.
We've made great progress in Japan, but challenges are still ahead. Aftershocks and electricity are uncertain, and the supply chain for raw materials are dynamic. It is often in these times that the adversity brings out the best in the people of TI. I've never been more proud to call myself a TIer as I've witnessed what our people have accomplished on an hourly, daily, and weekly basis to bring our fabs back to life. The tenacity, the resourcefulness of our people in Japan, and the willingness of our employees around the world to assist and support them speak volumes about the character of our people. That character and the values and the ethics that form its foundation, they serve us well.
I'm also pleased that today we have about 20 of the TIers that flew from Dallas to Japan in the early hours after the quake, not knowing whether the plane could even land at Narita Airport when it took off. They were heading over there to help their fellow TIers start the recovery immediately. These people are experts in their respective fields, and without question, they dropped everything that they were doing, both professionally and personally, to lend a hand. More than one of them had made it very clear that they are here today representing not just themselves but many of their colleagues, especially those in Japan that are working around the clock and have worked so hard to overcome the tough obstacles. I'd like to ask those folks to please stand.
True to form of the humility of TI, when we were trying to get the folks lined up that just recently got back, everyone made a point, "No, we shouldn't be standing. The people in Japan should be standing. There's other people that should be thanked." We will find a way to be able to take the appreciation you just saw and get it expressed to everybody else working around the clock. Folks, really, well done. It is impressive to see the restart and the recovery that you guys have driven as a team. Now, it has been a roller coaster of a year since I last spoke at this meeting. It's been exciting. It's been difficult, satisfying, all at the same time. Exciting because of all we've accomplished and the path of growth that we've put the company on.
Difficult because of the unexpected challenges we've had to address with the earthquake in Japan and its aftermath. Satisfying because in all, we've seen the determined spirit of our people and the inherent resiliency of our strategy. Time has proven the strategic soundness of our focus on analog and embedded processing. These are both large and fragmented markets in which we have strong positions but in which there is still a lot of room for growth. Both have diverse customers and applications, so we aren't tethered to a single market. Both have pervasive technologies that underpin the electronics of today and, more importantly, are the enablers of electronics of tomorrow. In fact, you can see in our first quarter earnings that were just announced on Monday how important our core businesses have become. They now comprise over 70% of our revenue.
As we look towards the rest of 2011, I am particularly excited to complete the acquisition of National and begin to provide our customers with unique solutions from our combined product portfolios. Having recently spent time with the people of National, I can assure you that we share some very important common interests in our love for analog semiconductors, our commitment to innovation, and in our belief that the only business worth doing is that which is done with the highest of ethical standards. As you can tell, I believe our future is full of promise. To our shareholders, I want to say thank you for believing in this same future. We have the will to win, and we're committed to delivering to you the value you expected when you bought a piece of our company. Mr. Secretary, have you received the results of the balloting?
I have, Mr. Chairman. According to the report of the inspectors, the 10 persons nominated by the Board have been elected. Over 94% of the shares cast were voted for the election of each of them. No more than 5% voted against and about 1% abstained. On the advisory vote regarding executive compensation, approximately 96% of the shares cast were voted to approve executive comp. Approximately 3% voted against and 1% abstained. On the advisory vote regarding the frequency of future votes on executive compensation, approximately 61% of the shares cast were voted in favor of a frequency of one year. 37% voted for three years. About 1% voted for two years. The Board of Directors' proposal to ratify the appointment of Ernst & Young as the company's independent registered public accounting firm was approved. Approximately 99% of the shares cast were voted in favor of the proposal and about 1% against. This concludes my report.
Joe, thank you. At this point, it is appropriate for the floor to be open for any questions. As a courtesy to all present or listening via webcast, our rules call for comments to be limited to five minutes per person, regardless of the number of topics you wish to address. I would ask that anybody that has a question, please go to a microphone. Please state your name and affiliation. It appears to be a quiet crowd. I want to thank everybody for attending today. I want to absolutely thank, again, this wonderful group that responded at Kevin Ritchie's very urgent request. It has been a pleasure to serve this past year, and I look forward to 2011. Thank you very much. Thanks for coming.