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Recently, Lattice Semiconductor Corporation (LSCC - Snapshot Report) increased its revenue expectations for the first quarter of 2013.

The chipmaker now expects sales to increase approximately 6%-8% sequentially versus its previous guidance of a decline of 2%-4%.

Management expects revenues to increase on account of strength in the communications and consumer markets. These markets are likely to benefit from increased spending by telecom companies such as AT&T Inc. (T - Analyst Report).

Telecom companies are expected to spend more on wireless and wireline network upgrades this year, thus benefitting Lattice. The communications and consumer markets represented approximately 46% and 15%, respectively of the company's fourth-quarter revenues.

Additionally, Lattice continues to gain traction in these markets led by its iCE field programmable gate array (FPGA)products. FPGAs are semiconductor devices that allow programming/reprogramming even after the device has been installed.

According to a Research and Markets report, the global FPGA market is poised to grow at a compounded annual growth rate (CAGR) of 10.4% from 2011 to 2015 driven by the growing demand for customizable integrated circuits (ICs). The bright prospects in the FPGA space can prove to be a long-term growth driver for Lattice.

Additionally, the company expects gross margin to be at the lower end of its prior guidance of approximately 54% (+/-2%) due to expectations of higher revenues. Total operating expense guidance of approximately $35.5 million, which includes approximately $0.5 million of restructuring charges, is expected to remain unchanged.

Late last year, the company had taken steps to restructure its sales and marketing functions, which would reduce operational spending by approximately $12 million annually. The company expects to incur total restructuring charges of approximately$6 million, of which $5.4 million was recognized in the fourth quarter.

It is imperative that Lattice continues to undertake various initiatives and develop new products, keeping in mind the interest of the organization in both the long and short run. We believe the restructuring action and new products in both consumer and non-consumer segments will bring in stability and steady earnings growth in the near future.

Lattice Semiconductor designs, develops and markets high performance programmable logic devices and related development system software. The company's fourth-quarter revenues were down 6.1% from the year-ago period to $70.2 million due to lower programmable logic devices (PLD) revenues. Revenues for FPGA were also down 5.4% year over year to $20.9 million.

Currently, Lattice has a Zacks Rank #3 (Hold). Other semiconductor stocks that have been performing well and are worth considering include Intersil Corporation (ISIL - Snapshot Report) and Qualcomm Inc. (QCOM - Analyst Report), both carrying a Zacks Rank #2 (Buy).

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