Lattice Semiconductor (LSCC) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Strategic focus and operational changes

• Shifted product strategy to focus on small and mid-range FPGAs, emphasizing Nexus and Avant lines, moving away from high-end SoC integration.

• Targeting applications requiring low power, low latency, and deterministic performance, especially as companions to CPUs, GPUs, and various sensors.

• Achieved high-volume supply, projecting over 200 million units this year and aiming for 250 million, with a focus on cost-effective, fast-boot FPGAs.

• Partnerships with leading silicon vendors (NXP, ST, Renesas) to deliver joint solutions, rather than integrating processors into FPGAs.

• Data center segment experiencing rapid growth, with server market up 85% year-on-year and strong demand forecasted through at least 2027.

Growth drivers and market dynamics

• Growth in compute and communications segments driven by increased server counts, higher AI content, rising attach rates, expanding applications, and evolving architectures.

• Security needs and disaggregated architectures are increasing FPGA content and ASPs per board.

• CapEx among hyperscalers projected to exceed $1 trillion by 2027, with company growth outpacing overall CapEx expansion.

• Custom silicon and FPGAs are coexisting, with the company positioning itself as an agnostic partner through the AMI acquisition.

Industrial and embedded segment outlook

• Industrial and embedded segment includes industrial, medical, aerospace, defense, consumer, and automotive markets.

• Inventory normalization achieved, with channel inventory reduced from six months to 2.2 months, targeting under two months.

• Strong design wins across multiple applications expected to drive growth, with significant content in areas like humanoids and autonomous vehicles.

• Three future growth vectors identified: data center, industrial embedded, and AMI.