Operator
We go next to Stacy Rasgon of Bernstein
Stacy Rasgon, Bernstein
Hi guys. Thanks for taking my question. I think to follow-up on that gross margin question, looks to me your implied guidance for margin is maybe 57%, maybe a little higher, so low 57%, down a little bit. And revenues are down slightly, with inventories a little higher. Could you just give us some feeling of — if you do not want to give numbers, maybe some of the drivers for gross margins in Q1 and in particular, what are you planning to do with the inventory on your own balance sheet? How will that turned [ph]?
Kevin March, SVP & Chief Financial Officer
Yes, I do not know that I’ll necessary have — I am not getting into the GPM, per se. Let me just talk a little bit more about what our inventory levels might look like and how that might drive us. We do not have an inventory forecast per se, but given the growth in consignment in a typically seasonally strong 2Q, we would expect our factory loadings to increase as we move to the quarters, as I mentioned a moment ago. One of the things to keep in mind when you adjust your factory loadings, if your quarterly loadings are really for the following quarters expectations, then if you think about the pattern of movements through the quarter, you take the loadings to come into fourth quarter, our loadings will be dropping coming into the quarter.
And going to the first quarter, our loadings start to increase during the quarter. And so you always going to have a bit of a lag when you try to track the GPM that follows with that, which I think that is what you are asking for there, Stacy. I think more importantly what we see going forward is that our margins we expect to continue to improve along with our free cash flow. By virtue of the fact that analog and embedded processing continue to become a larger portion of our total revenues, and by virtue of the fact that 300-millimeter manufacturing continues to be a larger portion of our total production, as we go forward and both of those result in both higher margin and higher free cash flow.
Stacy Rasgon, Bernstein
Got it, thank you. That is helpful. For my follow up, just to touch on the tax rate. So, your guidance for next year is 30%, a little higher than your guidance for 2014, which I think was 28%. I just wanted to verify, is the only real source of that just a higher profit versus expectation? I think you had told us before the tax every incremental dollar of profit around — at the incremental tax rate of 35%?
Kevin March, SVP & Chief Financial Officer
Yes, Stacy. That is correct. In fact our tax rate in 2014, our guidance was as you said, came rather down at 28%. It actually came just a little bit higher than that, if it were not for the R&D credit. So we are looking at rounding up the 30% as we move in to 2015. So you are exactly right as you model what you would expect our earnings and fall-through to be, you should tax that at approximately 35% Delta profit as it comes through during the year.
