Lattice Targets FPGA Growth

Lattice Semiconductor Targets FPGA Growth

Revenue growth for Lattice Semiconductor (LSCC - Snapshot Report) was poised to take off in 2009, as new design wins were expected to convert. However, the recession completely changed the scenario, with the company seeing lower backlog and turns. However, the product line is much improved, and management focus has shifted to generating revenue and profits.

According to data submitted by the World Semiconductor Trade Statistics (WSTS), semiconductor sales were $248.6 billion in 2008, down -2.8% from 2007 levels. The SIA expects semiconductor sales to decline again in 2009 by around -5.6%.

The continued pricing pressure in the memory chip category, combined with the deepening recession is primarily responsible for the lower expectations. The general-purpose logic and application specific product categories accounted for 38% of the worldwide semiconductor market in 2008, according to market research firm iSuppli.

Within the programmable logic market, FPGA accounted for $3.1 billion in 2008 and PLD $0.7 billion. Lattice Semiconductor’s products cater to both portions of the programmable logic market. The company reports revenue along these two segments, each of which represents a distinct architectural approach.

The revenue contribution from PLDs was 74% in 2008, compared to 77% in 2007 and 80% in 2006. The share of FPGA revenue has continued to increase in-line with management’s plans, accounting for the remaining portion of total revenue in each of the last three fiscal years.

Crossover Technology is of Strategic Importance

Lattice introduced the MachXO product family in 2006. The family consists of four devices, which are currently in production. The XO, or crossover technology is strategically important for the company, since the architecture is targeted at CPLD customers that are transitioning to FPGAs.

Although the product is pitted against the Max II (from Altera), the XO family has several competitive advantages. For one, it is based on 130nm technology, while the Altera product is based on 180nm technology. Management contends that the products’ superior architecture and embedded memory is more characteristic of FPGAs, supporting more complex applications such as microcontrollers that require greater memory.

They also have a power-down feature and use chip-scale packaging, which makes them suitable for portable consumer applications. Revenue from the XO family grew 20% sequentially and more than doubled over the corresponding prior-year quarter.

Sejuti Banerjea contributed to this report.