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Item 1. Business

2024-02-16 compared with 2023-02-17 · 35 added, 65 removed, 164 unchanged (38% of the section changed)

Lattice Semiconductor Corporation and its subsidiaries (“Lattice,”

the “Company,”

“we,”

“us,”

or “our”) develop technologies that we monetize through differentiated programmable logic semiconductor products, system solutions, design services, and licenses.

Lattice Semiconductor Corporation and its subsidiaries (“Lattice,” the “Company,” “we,” “us,” or “our”) develop technologies that we monetize through differentiated programmable logic semiconductor products, system solutions, design services, and licenses.

Lattice is the low power programmable leader.

We solve customer problems across the network, from the Edge to the Cloud, in the growing Communications, Computing, Industrial, Automotive, and Consumer markets.

We solve customer problems across the network, from the Edge to the Cloud, in the Communications, Computing, Industrial, Automotive, and Consumer markets.

Our technology, long-standing relationships, and commitment to world-class support enable our customers to create a smart, secure, and connected world.

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In particular, we believe there are several emerging trends in servers, infrastructure, and smart devices that are opportunities for Lattice:

With the growth of hyperscale datacenters, our “processor agnostic”

solutions are ideal for control and connect functions in enterprise and datacenter server applications.

With the expected continued Communications infrastructure build-out from 5G deployment and beyond, as well as continued datacenter network expansion, Lattice solutions are being adopted to control and connect a variety of functions in critical systems.

With the growth of hyperscale data centers, our “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, our low power, small form factor solutions are ideal for everything from battery powered systems and sensor applications to embedded vision.

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With the demand for more hardware security in the Communications, Computing, Industrial, Automotive, and Consumer markets, our devices provide enhanced platform security.

To serve these emerging needs, customer solutions require power efficiency, memory bandwidth, processing power, and the ability to integrate complex functionality into a highly compact footprint.

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 our FPGA devices.

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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 solve these customer problems.

Lattice FPGAs help solve these customer problems.

Our FPGAs are optimized for input/output ("I/O") expansion, hardware acceleration, and hardware management.

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Finally, our 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 our products enable intelligent automation in the Industrial and Automotive Market include Industrial Internet of Things ("IoT"), machine vision, robotics, factory automation, advanced driver assistance systems ("ADAS"), and automotive infotainment.

Examples of where our 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.

Our Industrial and Automotive customers face numerous challenges:

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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.

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.

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Lattice FPGAs bring multiple benefits to these customers.

An FPGA’s parallel architecture enables faster processing than competing devices, such as microcontrollers, allowing for a user experience with shorter pauses and fewer delays.

Our 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, we enable thinner and more compact end products.

Our proprietary solutions help our customers get their products to market faster than typical development cycles of custom ASICs.

With re-programmability and flexibility, our FPGAs inherently allow our customers to have quicker product development.

The time-to-market advantages of Lattice's solutions are critical given the shorter product life cycles in our customers’

The time-to-market advantages of Lattice's solutions are critical given the shorter product life cycles in our customers’ end markets.

Our Products, Services, and Competition

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We also serve our 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.

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Lattice FPGA product families include:

The Lattice Avant™, Certus™

and LatticeECP™

device families are our “General Purpose FPGAs”

and address a broad range of applications across multiple markets.

The Lattice Avant™, Certus™ and LatticeECP™ device families are our “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 introduction in our general purpose family, Lattice Avant-E™

FPGAs, are designed to solve key customer challenges at the Edge by combining class-leading power efficiency, size and performance with an optimized feature set tailored to the needs of mid-range FPGA Edge applications like data processing and AI.

The Lattice Mach™

device family are our “Control & Security FPGAs”

and are designed for platform management and security applications.

The latest introductions in our 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 our “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.

FPGAs are widely used across our three end market groups:

Mach™ FPGAs are widely used across our three end market groups:

Communications and Computing, Industrial and Automotive, and Consumer.

Lattice MachXO5™-NX family, the fifth device built on the award-winning Lattice Nexus™

platform are our latest addition to the Mach™

FPGA family, enabling the latest generation of secure control through increased logic and memory resources, robust 3.3 V I/O support, and a differentiated security feature set.

The Lattice iCE™

device family are our “Ultra Low Power FPGAs.”

Their small size and ultra-low power make them the optimal products for each of our 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 our "Video Connectivity FPGAs" and are optimized for high-speed video and sensor applications.

CrossLink combines the power and speed benefits of hardened video camera and display bridging cores with the flexibility of FPGA fabric.

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 its class, higher performance, and high reliability.

These products are designed for Computing, Industrial, Automotive, and Consumer markets, but also find use in Communications.

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 our “Ultra Low Power FPGAs.” Their small size and ultra-low power make them the optimal products for each of our 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 our "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 our customers to get to market faster we support our FPGAs with IP cores, reference designs, development kits, and design software.

We are investing in our 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.

We have developed integrated system-level solution stacks, such as Lattice ORAN™

for robust control data security, flexible fronthaul synchronization, and low power hardware acceleration for secure, adaptable, Open Radio Access Network (ORAN) deployment, as well as Lattice sensAI™

for Edge AI applications, Lattice mVision™

for low power embedded vision, Lattice Sentry™

for implementing hardware security, and Lattice Automate™

for industrial automation and robotics.

We combine all of these elements to solve specific customer problems such as the need to quickly implement low power AI inferencing in Edge applications.

Further, we have application software such as Glance by Mirametrix™

that allows users to control the AI and computer vision experience of their end systems.

We are investing in our 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.

We have 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 our newest solution stack - Lattice Drive™ for advanced, flexible automotive system designs and applications.

Further, we have 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.

Depending on the application, we may compete with other FPGA vendors, as well as producers of ASICs, ASSPs, and microcontrollers.

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We generate revenue from our technology portfolio via upfront fees and on-going royalty payments through the following activities:

Standard IP Licensing - these activities include our 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.

Standard IP Licensing - these activities include our 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 us.

IP Core Licensing - some customers need Lattice’s technology for specific functions or features, but for various reasons are not able to use our silicon solutions.

In those cases, we may license our IP cores, which they can integrate into their own ASICs.

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We rely on third party vendors to provide cost-effective and efficient supply chain services.

Among other activities, these outsourced services relate to direct sales logistics, which include order fulfillment, inventory management and warehousing, and the shipment of inventory to third party distributors.

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

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We partner 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 our Nexus platform of FPGA products.

We partner with United Microelectronics Corporation ("UMC") and its subsidiary United Semiconductor Japan Corporation ("USJC") to manufacture our products on its 130nm, 90nm, 65nm, and 40nm CMOS process technologies, as well as embedded flash memory in these process nodes.

We partner with United Microelectronics Corporation ("UMC") and its subsidiary United Semiconductor Japan Corporation ("USJC") to manufacture our products on its 130nm, 90nm, 65nm, and 40nm CMOS process technologies, as well as embedded flash memory in these process nodes.

We partner with Seiko Epson ("Epson") to manufacture our 500nm, 350nm, 250nm and 180nm products.

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Wafer sort testing is primarily performed by ASE in Taiwan and Malaysia, Amkor in Japan, and our 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.

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Human Capital Management

We provide a safe and positive work environment that emphasizes respect for individuals, ethical conduct, and learning and development that is facilitated by a direct employee engagement model. The health and safety of our employees is of utmost importance to us.

We have aligned to local COVID-19 guidance to return to normal operations while maintaining actions to safeguard the health and well-being of our employees and our business.

We provide a safe and positive work environment that emphasizes respect for individuals, ethical conduct, and learning and development that is facilitated by a direct employee engagement model.

The health and safety of our employees is of utmost importance to us.

We undertake appropriate actions to safeguard the health and well-being of our employees and our business.

Recognizing and respecting our global presence, we strive to maintain a diverse and inclusive workforce everywhere we operate.

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We strive to attract and retain talented employees by offering competitive compensation and benefits that support their health, financial, and emotional well-being.

Our compensation philosophy is based on rewarding each employee’s individual and team contributions and striving to achieve equal pay for equal work.

We use a combination of fixed and variable pay including base salary, bonuses, performance awards, and stock-based compensation.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business