About Lattice Semiconductor

Lattice Semiconductor Corporation and its subsidiaries (Lattice) develop technologies that the company monetizes through differentiated programmable logic semiconductor products, system solutions, design services, and licenses. Lattice is the low power programmable leader. The company solves customer problems across the network, from the Edge to the Cloud, in the Communications, Computing, Industrial, Automotive, and Consumer markets. The company’s technology, long-standing relationships, and commitment to world-class support enable the company’s customers to create a smart, secure, and connected world. The company’s field programmable gate array (‘FPGA’) devices enable the company to provide its customers with a strong, growing base of control, connect, and compute technologies. There are multiple growth areas that will allow the company to increase its addressable market. In particular, there are several emerging trends in servers, infrastructure, and smart devices that are opportunities for Lattice: With the growth of hyperscale data centers, the company’s ‘processor agnostic’ solutions are ideal for dataplane control and connect functions in enterprise and data center server applications. With the expected continued Communications infrastructure build-out from 5G deployment and beyond, as well as continued data center network expansion, Lattice solutions are being adopted to control and connect a variety of functions in critical systems. With the increase in electrification and the proliferation of sensors in smart factories, smart homes, and automobiles, the company’s low power, small form factor solutions are ideal for everything from battery powered systems and sensor applications to embedded vision. With the increase in artificial intelligence (‘AI’) and a multitude of applications at the network edge, Lattice devices support applications like face detection, image recognition, and video analytics. With the demand for more hardware security in the Communications, Computing, Industrial, Automotive, and Consumer markets, the company’s devices provide enhanced platform security. To serve these needs, customer solutions require power efficiency, memory bandwidth, processing power, and the ability to integrate complex functionality into a highly compact footprint. These requirements align with the capabilities of the company’s FPGA devices. The company’s flexible, low power, small form factor, performance optimized FPGAs put the company in a unique position to meet these growing market needs. Markets and Customers The company sells its products globally in three end market groups: Communications and Computing, Industrial and Automotive, and Consumer. The company also provides Intellectual Property (‘IP’) licensing and services to these end markets. In the Communications and Computing Market, the company’s solutions play key roles in computing systems, such as servers and client devices, 5G wireless infrastructure, switches, routers, and other related applications. The company’s Communications and Computing customers need to address a variety of challenges. As client compute devices become smaller and smarter, there is a need for small form factor devices with power efficiency to interface with a variety of sensors and add intelligence. As server architectures become increasingly complex, customers need simplified control logic, enhanced hardware platform security, system status monitoring, and rigorous power and thermal management. Networks typically require progressively higher bandwidth and increased reliability as more data is demanded by connected devices. As wireless cellular sites become more compact, there is a growing requirement for smaller form factors optimized for low power consumption and thermal management. Lattice FPGAs help solve these customer problems. The company’s FPGAs are optimized for input/output (‘I/O’) expansion, hardware acceleration, and hardware management. The company’s FPGAs consume power at very low rates, which reduces operating costs. Their small form factor enables higher functional density in less space. Finally, the company’s FPGAs are I/O rich, which allows for more connections with system application specific integrated circuits (‘ASICs’) and application specific standard products (‘ASSPs’). Examples of where the company’s products enable intelligent automation in the Industrial and Automotive Market include industrial Internet of Things (‘IoT’) and ‘Industry 4.0’, machine vision, robotics, factory automation, advanced driver assistance systems (‘ADAS’), and automotive infotainment. The company’s Industrial and Automotive customers face numerous challenges: As factories automate to improve efficiency and employee safety, sensors, machine vision, and robotics are proliferating, in turn requiring increasing amounts of data to be gathered, connected, and processed. Automobiles and other forms of transportation are also becoming smarter and more connected. Drivers and passengers are demanding better in-cabin experiences including entertainment, diagnostics, and enhanced safety — often involving multiple displays, cameras, and sensors. As factories and automotive manufacturers continue their evolution of computerization, power reduction, faster time to design-in and market, lower costs are becoming increasingly normal. The company’s product portfolio helps solve these challenges. The company’s small-sized, low-power FPGAs not only provide the I/O expansion, bridging, connectivity, and processing inherent in FPGAs, but they also form the backbone of several integrated solutions, including motor control, complete High Definition (‘HD’) camera and DVR solutions on a single FPGA device, and Human-Machine Interfaces (‘HMI’) on a chip. In the Consumer Market, the company offers smart home devices, prosumer devices, sound bars, high end projectors, Augmented Reality (‘AR’) / Virtual Reality (‘VR’), and wearables. The company’s Consumer customers are driven by the need to deliver richer and more responsive experiences. The company’s FPGAs are among the most power efficient in the industry, enabling the application processor and other high-power components to remain dormant longer, resulting in longer battery life. Finally, with some of the industry’s smallest packages, the company enables thinner and more compact end products. The company’s proprietary solutions help its customers get their products to market faster than typical development cycles of custom ASICs. With re-programmability and flexibility, the company’s FPGAs inherently allow its customers to have quicker product development. Products and Services The company is focused on delivering FPGAs and related solutions to help solve the company’s customers' problems. The company also serves its customers with IP licensing and various other services. Field Programmable Gate Arrays (‘FPGAs’) FPGAs are regular arrays of logic that can be custom-configured by the user through software. This programmability allows the company’s customers flexibility and reduced time to market while allowing the company to offer the chips to many different customers in many different markets. Lattice FPGA product families include: The Lattice Avant, Certus and LatticeECP device families are the company’s ‘General Purpose FPGAs’ and address a broad range of applications across multiple markets. They offer customers the optimal cost per gate, Digital Signal Processing (‘DSP’) capability, and Serialize-Deserialize (‘SERDES’) connectivity. ECP devices are optimized for the Communications and Computing market but also find significant use in the Industrial, Automotive, and Consumer markets. The latest introductions in the company’s general purpose family, Lattice Avant-G and Lattice Avant-X FPGAs, are designed to solve key customer challenges by combining class-leading power efficiency, size and performance with an optimized feature set tailored to the needs of mid-range FPGA applications like sensor fusion, datapath networking, and AI. The Lattice Mach device family are the company’s ‘Control & Security FPGAs’ and are designed for platform management and security applications. They are control-oriented and offer optimized cost per I/O and cost per look-up table. Mach FPGAs are widely used across the company’s three end market groups: Communications and Computing, Industrial and Automotive, and Consumer. The Lattice MachXO5T-NX family, the latest devices built on the award-winning Lattice Nexus platform are the newest addition to the Mach FPGA family, bringing Lattice’s long-standing leadership in control FPGAs to a broader set of control function designs and applications for enterprise networking, machine vision, and industrial IoT. The Lattice iCE device family are the company’s ‘Ultra Low Power FPGAs.’ Their small size and ultra-low power make them the optimal products for each of the company’s core segments where small form factor and customizing is required. The latest member of the family, the iCE40 UltraPlus device, is focused on IoT Edge devices with its AI capabilities, low power, and small form factor. The Lattice CrossLink device family are the company’s ‘Video Connectivity FPGAs’ and are optimized for high-speed video and sensor applications for the Industrial, Automotive, Communications, Computing, and Consumer markets. CrossLink combines the power and speed benefits of hardened video camera and display bridging cores with the flexibility of FPGA fabric and Lattice CrossLinkPlus devices provide users with instant-on capabilities for video display. Lattice CrossLink-NX FPGAs, built on the Lattice Nexus platform, provide the lowest power in the smallest packages in their class, higher performance, and high reliability. The latest device family – Lattice CrossLinkU-NX – are the industry’s first FPGAs with integrated USB device functionality in their class, designed to meet growing customer needs to simplify USB-based design for applications across the Computing, Industrial, Automotive, and Consumer markets. To enable the company’s customers to get to market faster the company supports its FPGAs with IP cores, reference designs, development kits, and design software. The company is investing in its design software, such as Lattice Radiant, to deliver best-in-class tools that enable predictable design convergence, and Lattice Propel for unparalleled ease in creating embedded processor-based designs. The company has developed integrated system-level solution stacks, including Lattice Automate for industrial automation and robotics, Lattice mVision for low power embedded vision, Lattice ORAN for robust control data security, flexible fronthaul synchronization, and low power hardware acceleration for secure, adaptable, Open Radio Access Network (ORAN) deployment, Lattice sensAI for Edge AI applications, Lattice Sentry for implementing hardware security, and the company’s newest solution stack - Lattice Drive for advanced, flexible automotive system designs and applications. Further, the company has application software, such as Glance by Mirametrix that allows users to control the AI and computer vision experience of their end systems for Client computing, industrial, and automotive applications. Legacy Semiconductor Products The company also sells Video Connectivity ASSPs, although the company is not developing new products in this area and their support requirements are minimal. IP Licensing and Services Lattice has a broad set of technological capabilities and many U.S. and international patents. The company generates revenue from its technology portfolio via upfront fees and on-going royalty payments through the following activities: Standard IP Licensing - These activities include the company’s participation in two consortia for the licensing of High-Definition Multimedia Interface (‘HDMI’) and Mobile High-Definition Link (‘MHL’) standard technologies to customers who adopt the technology into their products and voluntarily report their usage and royalties. The royalties are split among consortium members, including the company. IP Core Licensing - Some customers need Lattice’s technology for specific functions or features, but for various reasons are not able to use the company’s silicon solutions. In those cases, the company may license its IP cores, which they can integrate into their own ASICs. In contrast to the use of consortia, these licensing activities are generally performed internally. Patent Monetization - The company considers sales of certain patents from its portfolio generally for technology that the company is no longer actively developing. The revenue from these sales generally consists of upfront payments and potential future royalties. IP Services - The company undergoes projects and design services for customers who wish to develop specific solutions that harness the company’s proven technology and expertise. Operations The company operates primarily as a fabless semiconductor provider and, therefore, the company maintains strategic relationships with large, established semiconductor foundries to source the company’s finished silicon wafers and manufacture the company’s silicon products. This strategy allows the company to focus its internal resources on product and market development. The company is able to take advantage of the ongoing advanced process technology development efforts of semiconductor foundries and apply those technologies when they become most economically beneficial to the company and to its customers. The company relies on third party vendors to provide supply chain services. Among other activities, these outsourced services relate to inventory management and warehousing, lead time management, order fulfillment, and the shipment of inventory to third party distributors. Wafer Fabrication Lattice partners with Taiwan Semiconductor Manufacturing Company (‘TSMC’) to develop and manufacture on 16nm technology, which is used in the company’s Avant platform of FPGA products, and to manufacture the company’s 350nm, 130nm, 55nm and 40nm products. The company partners with Samsung Semiconductor (‘Samsung’) to develop and manufacture the first low-power FPGA on 28nm fully depleted silicon-on-insulator (‘FD-SOI’) technology, which is used in the company’s Nexus platform of FPGA products. The company partners with United Microelectronics Corporation (‘UMC’) and its subsidiary, United Semiconductor Japan Corporation (‘USJC’) to manufacture the company’s products on its 130nm, 90nm, 65nm, and 40nm CMOS process technologies, as well as embedded flash memory in these process nodes. The company partners with Seiko Epson (‘Epson’) to manufacture the company’s 500nm, 350nm, 250nm and 180nm products. The company sources silicon wafers from its foundry partners, TSMC, Samsung, UMC, USJC, and Epson, pursuant to agreements with each company and their respective affiliates. Assembly All of the company’s assembly and test operations are performed by industry-leading outsourced assembly and test suppliers (‘OSATs’) with the company’s primary supplier being Advanced Semiconductor Engineering, Inc. (‘ASE’). The company performs certain test operations, as well as reliability and quality assurance processes internally during the development process. The company has achieved and maintained ISO9001:2015 Quality Management Systems Certification and released a line of products qualified to the AEC-Q100 Reliability Standard in the support of Automotive product offerings in addition to ISO26262 certification on both Automotive products and software. After wafer fabrication and initial testing, the company ships wafers to independent subcontractors for assembly. During assembly, wafers are separated into individual die and encapsulated in plastic packages. The company has qualified two major assembly partners, ASE and Amkor Technology (‘Amkor’) and are second sourced where volume and customer requirements are necessary. All ASE and Amkor manufacturing of the company’s products is in Asia. The company offers an extensive list of standard products in lead (Pb) free packaging. The company’s lead-free products meet the European Parliament Directive entitled ‘Restrictions on the use of Hazardous Substances’ (‘RoHS’). A select and growing subset of the company’s RoHS compliant products are also offered with a ‘Halogen Free’ material set. Testing (Sort and Final Test) The company electrically sort tests the die on most wafers prior to shipment for assembly. Wafer sort testing is primarily performed by ASE in Taiwan and Malaysia, Amkor in Japan, and the company’s second source, King Yuan Electronics Co. (‘KYEC’) in Taiwan. Following assembly, but prior to customer shipment, each product undergoes final testing and quality assurance procedures. Final testing is performed by ASE and Amkor. Sales and Revenue The company generates revenue by monetizing its technology designs and patents through product and technology sales. This involves distribution channel and direct sales of silicon-based hardware and silicon-enabling products, as well as the licensing or sale of IP that the company has developed or acquired, some of which the company uses in its products, and certain design services that the company may provide. Sales and Customers The company primarily sells its products to customers from Lattice Semiconductor Corporation or the company’s wholly-owned subsidiary, Lattice SG Pte. Ltd. Independent distributors are significant customers, and a substantial portion of the company’s sales are made into this channel. Additionally, the company sells both directly and through a network of independent manufacturers' representatives. The company also employs a direct sales management and field applications engineering organization to support the company’s end customers and indirect sales resources. End customers for the company’s products are primarily Original Equipment Manufacturers (‘OEMs’) in the Communications and Computing, Industrial and Automotive, and Consumer end markets. The company’s sales team attempts to drive multi-generational design wins within these OEMs and leverages the company’s distribution partners to grow the company’s broad customer base. The company provides global technical support to its end customers with engineering staff based at the company’s headquarters, product development centers, and selected field sales offices. The company maintains numerous domestic and international field sales offices in major metropolitan areas. In the year ended December 30, 2023 (fiscal year 2023), sales to distributors accounted for approximately 87% of the company’s net revenue. The company depends on its distributors to sell its products to end customers, complete order fulfillment, and maintain sufficient inventory of the company’s products. The company’s distributors also provide technical support and other value-added services to its end customers. The company has multiple global distributors. The company also has regional distribution in Asia, Japan, Europe, and Israel. The company sells through three major on-line distributors. IP and Patents The company holds numerous United States and international patents and has patent applications pending in the United States and internationally. The company’s patents will expire at various times over the next 20 years. History Lattice Semiconductor Corporation was founded in 1983. The company was incorporated in 1983.