Lattice Semiconductor (LSCC) 17 Feb 212020 Q4 Earnings call transcript

Company Profile

Participants

Rick Muscha	Director, Investor Relations
Jim Anderson	President and CEO
Sherri Luther	Chief Financial Officer
Hans Mosesmann	Rosenblatt Securities
Alessandra Vecchi	William Blair.
Matt Ramsay	Cowen
Tristan Gerra	Baird
Mark Lipacis	Jefferies
Christopher Rolland	Susquehanna
Derek Soderberg	Colliers Securities
Richard Shannon	Craig-Hallum

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by for Lattice Semiconductor’s Fourth Quarter 2020 Financial Results Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. A replay will be available approximately 2 hours after the call today. The replay dial-in number is 404-537-3406. is number ID conference XXXXXXX. The also The at on website accessible replay will www.lscc.com. Lattice’s be now the I Mr. to like would turn call to over Rick of Director Muscha, Lattice Investor Relations. Semiconductor’s go Please ahead.

Rick Muscha

are good Sherri the and Lattice’s business XXXX first of CFO. financial the With Thank the and a Luther, afternoon, quarter provide outlook business Operator, Lattice’s President for and me you, of and today and Jim We’ll fourth Anderson, CEO; of everyone. XXXX. review quarter

call. If time using this publicly this such after files in done conference XXXX. and of earnings any at such not important materially statements. factors a with wish forum, caution We and press could XX-Ks, our at call, remind have the If would and any conference currently obtained differ we at make official to forward-looking the our that results the be statements This in will regarding quarter intend of refer our we our are release call contained guidance, like to future constitutes during it identify projections statements available a cause may company includes actual found to may events release, you information as projections our or the of performance that company. material from copy can public or you communicate Investor risk and for latticesemi.com. changes to call the documents to These those website the the or other that that differ including company company’s materially. such or announced guidance X-Ks. based you that financial the SEC, contain first on XX-Qs, today, predictions Relations everyone section a forward-looking press be results is we that actual I We updates documents future the

GAAP will both uses additional to company’s and to disclosing By better information measures the operational intends and operating provided certain that permit establish a financial performance management of be Management to non-GAAP with during a basis. analysis information we investors present trends. information, non-GAAP the on underlying further call goals. Some non-GAAP provide assess and performance to

reconciliations periods, historical of financial can measures non-GAAP provide found we Investor section website GAAP of on measures these at For that to the latticesemi.com. our be Relations financial

I’d to we that everyone Before Investor will like virtual started, a we know be get let Day in hosting May.

more hope sharing We be details all month can join will coming you us. the and over

me our Let to call now CEO. Anderson, turn the Jim over

Jim Anderson

everyone and XXXX. in want strong in and year team, for Thank as for opportunities more joining on XXXX. by I’m the us the well last our that thanking ahead of with pleased today. our we customers and you, made thank you progress I support even excited and their Lattice call Rick, to about partners I’m start as the execution us

and hardware closing platform. cover me expanded our highlights of based by year-over-year, QX We few as and year-over-year. XX% on roadmap, launched time we execute our net executed income products optimization strategy new and continue on Nexus our product non-GAAP increasing on We our to with profitability On reduction. expanded team pricing two automotive. cost computing, at largest Let segments two communications double and non-GAAP industrial and a digits grew basis XXX year-over-year now our revenue We margin in gross of XX.X%, from points XXXX.

vision focused platform design. applications, also system and three software embedded new on We embedded security launched products

ramp client strong servers, The computing QX. -- versus of year-over-year, In we by by production revenue our increase platform rates increased saw In by by and the platforms, Let and XG began in and year-over-year In XX% reflecting was a attach growth computing including computing, growth was in of both me this now which new XG driven the content expansion year-over-year. client client XG. business in our second for growth servers, provide market growth XG an ASPs reflect infrastructure, in consecutive driven ramp year market, in driven was double-digit new the is In XXXX. of overview growth computing that higher infrastructure. revenue communications end segment.

We continue and growth as computing a multiple its to long-term see growth driver, vectors. communications given

Turning now softness the despite and increased automotive XX% end industrial to pandemic. year-over-year, the market some global to revenue market, due

competitive automation, advantages Our and business applications as solutions provide such number Lattice customers. of a where safety for industrial grew across our robotics, significant

for is As product automotive the portfolio and electronics Lattice the continues to term for industrial need well-positioned growth. increase, long

weaker caused of declined the in in with multi-generational as designs that saw due pandemic, a XX% business. better towards last QX over years of stream from QX. well this improved quality global the I’ll general Both we our XXXX. portfolio. revenue expected now value in have Turning to December, XXXX, product The has Mach-NX, on two in as purpose launched In provide our stabilized end of highlights FPGA. w year FPGA increase products execution. the our revenue execution XXXX, sequential our targeted time FPGA in as customers. shift two as When launched launched the higher FPGA with leverage We products demand platform this now security promised revenue team’s our of December June, by the consumer, launched segment to to Certus-NX, committed were pleased Nexus-based additional some we our recent is I’m releasing focused Nexus roadmap very we we applications. which our XXXX. in to second-generation on to And mix

segments look be Day broad our additional upcoming our market new products to at Investor sharing our to roadmap. I with the information continue more pleased about our across on platform of adoption forward Nexus market of We all and

of easy strategy to software our their to develop a into make fast key solutions customers portfolio products get R&D broader Another is market our of design systems quickly. our element to and and to it for

in security embedded as we of our second as software continued accelerated half, stack. we as software with We vision our During XXXX, I’m products we towards year, platform Century, our mVision, cadence first and portfolio. launched Propel, In summary, And of software our stack, very we well portfolio XXXX. financial our the significantly significantly progress to long-term strengthened model. our product the in the the environment. design launched In pleased made execute we strengthened the Lattice embedded new half system

Our market two segments grew largest XX%. income double and year-over-year our digits net expanded by we

began XXXX, executing increased turn growth we to I’ll markets As extremely the revenue and our are on profitability. and sustained focused over team across has strategy and now Sherri customer engagements energized for all Luther. call our our CFO, our strong

Sherri Luther

Jim. you, Thank

XXXX and in ended challenging balance first expansion, in cash time a strengthen position sheet the pleased a to for year our six are with significant net environment, profit year full our results. In We we continued the years. delivered

was compared QX the lower from revenue our basis to ago QX, XXXX quarter segments, IP. Fourth the and well Let and a year up was a summary and margin communications and was computing me from quarter, and offset growth primarily two sequentially X% but XXX GAAP automotive. sequentially third now was communications up to market but the computing and revenue up segment Full X.X% as quarter. XXXX. and prior came was Gross The on from at was IP $XXX.X our in in X% down up of compared year year-over-year by consumer industrial revenue consumer largest industrial $XXX.X growth lower. million, and was provide flat from basis XX.X% as points year-over-year. quarter results. in revenue Revenue automotive, million, Revenue grew

basis up the non-GAAP XXX quarter. compared quarter QX gross margin increased to to basis prior and points Our the to XX points was year ago XX.X% in compared

basis expanded For the full GAAP year to from a on basis XX.X%, XXXX, points XXX up gross margin XXXX.

margin the in $XX.X million the a $XX.X ago the gross improvement expenses strategy, quarter. million, result compared gross the the million non-GAAP in were points compared primarily of On $XX.X for million XXXX ago was optimization product million, in and operating were year expenses reductions. quarter. quarter non-GAAP up XXXX to basis was year QX our Our margin XXX XXXX. from to $XX prior pricing in in prior operating and full GAAP quarter and The $XX.X year cost basis, a margin XX%, improvement $XX.X million

million operating as year a For On remained spending at million full in XXXX. XXXX XXXX year the increased in expenses to and spending in full SG&A. basis, the we versus GAAP from increase $XXX.X million $XXX.X for XXXX flat in XXXX, expenses decrease relatively non-GAAP $XXX.X operating R&D

basic XX.X% continue from per and we to GAAP per $X.XX to from diluted and in increased product quarter invest full as in $X.XX of XX.X% in At year for which to compared the year ago revenue from and non-GAAP $X.XX portfolio the Specifically, share, share was QX in the $X.XX XXXX XXXX earnings XXXX. diluted QX the compared basic diluted increased of was prior expansion, share to per R&D we year was share ago and in cents per SG&A XXXX. per quarter prior earnings quarter. the our of $X.XX reduced in in to $X.XX revenue same per quarter. share, time, the XX.X% $X.XX revenue flat diluted share XX.X%

Driving diluted $X.XX basic share share share a $X.XX from and basic cash For the per year diluted of company. per and generation for share. key the full per increased focus area per the basis $X.XX year share full diluted basic of GAAP increased $X.XX per XXXX to basic EPS full year full a from be diluted share year EPS per and per and of the of per $X.XX XXXX XXXX XXXX share. continues share $X.XX flow $X.XX On $X.XX for non-GAAP the

year operations. we in the million For from XXXX cash generated full $XX

stock We $XXX cash year also in cash, buyback under program million repurchased in $XX position. stock approximately net the our continuing shares million our positive or XXX,XXX exiting with

XXXX for non-GAAP $XX $XXX be first X% Let for on Total to million basis. plus is to expenses Gross expected between million are me non-GAAP and and the review margin or first million. is our million quarter of now minus to a Revenue for quarter. expected first the expected quarter the on be a $XX be between $XXX operating XX.X% basis. outlook

and growth as XXXX, we open the for can for we are expanding accelerating As build now on shareholders. and question. we Operator, focused we begin call value additional profitability, revenue Lattice our

Operator

Instructions] Rosenblatt question Our Securities. [Operator from Hans first Mosesmann from is

is open. line Your

Hans Mosesmann

you. of impacting you. is supply Thank execution. constraints. season follow-on. a theme this get Thank Congratulations, have questions. I Hey, is couple earnings guys. a and the I of your business How Good that

Jim Anderson

question. the for Thanks Hans. Thanks,

But terms pretty position good a in quarters with a position we’re Lattice of couple There done ago a terms -- make there’s supply I Certainly, supply semiconductor the of our customers are to good supply being chain supported think, their sure the number that has think, proactively to us that team our we respect things pretty were right tightness in on good of in did in for specifically, a So job put chain demand. I overall. industry now. in to supply.

thing we to first point of we last supply, to The you year, build plenty of plenty inventory strategically see. inventory QX then they of upside back any had support also if said, is, in sure I’d to were out to we going demand that recall natural and might start customers our that make

QX inventory. of referring so or build and not built in I’m out make We QX. to that’s we that inventory. risk channel in And there’s built we I sure that to That’s internal volume again inventory inventory running QX then Lattice on where -- point distributor did parts, And no we obsolescence. to. high And want so inventory significant and specifically

internal So Lattice inventory.

sure thing forward. I And as spot changed in working we our supporting was and of us with this we really the in to good really began then so strategy, out that over we is, chain outlooks improved well. put multiyear think we make back long-term a them upside period, demand drive potential and working not moving to XXXX capacity including really closely second customer in with working capacity, those our that’s terms nominal plan the were suppliers, closely really a demand And capacity expectations strategic did supply them suppliers proactively and but on just our our multiyear as with giving to

to supply then, those that follow we think a kind had on well. us customers. a I of Hans, actions put spot in proactive with good respect so pretty our took you to And said, you two as And

Hans Mosesmann

Yeah. despite having I curious guys part did. of that consumer the I’m business. you grew

as decline were programmable perspective XXXX? growing So how from are you us in Intel’s Xilinx and guys why an give Altera -- FPGA perspective, can in business you in to

Jim Anderson

Yeah. Thanks, Hans.

which, right, in are market That’s compute industrial accounted we growth particularly results, segments. our for revenue comms actually our with long-term pleased and areas two really overall. We auto, QX And our view of the XX% and those largest for and as quite company. in roughly

year, full comms in and at year-over-year in computing actually grew terms XX% first, of grew QX. year-over-year If computing, just XXXX, you we XX% QX look for and comms in

our respect with automation, and growth then as a and industrial attach go that servers increasing the a the am per infrastructure of just and you past. good new We’ve began servers or look Lattice is, content capability actually, quite being see Lattice And performance if driving And seeing We’ve we’re that an chips industrial this full in then really or server, a that will week our was just parts industrial benefit number about what’s growth full that platforms year-over-year. that server the comms see as auto, We’ve new robotics, for into a drivers last falls expansion last within the I for customers platforms the as well within pandemic, around we’ll number ramp also XX% safety. pleased at a and end talked year segment. seen driver year and specific we’ll XX% -- as worth in XG or growth that could to segment. ASPs chips brought that and of of year-over-year of are auto growth computing in And year’s And again, rate so with -- we’re in client year production. again our compute to production we of number shipped the market of us seen with, the year-over-year, into industrial servers. more full QX benefit production well despite

was unexpected industrial auto. certainly, as segment and as compute for pleased the but we growth pretty business, with yeah, forward execution those consumer And expect pandemic, on we’re shift due the in us as mix to year weak drivers well moving our and comms to our well. last and So, be quite

Hans Mosesmann

Congratulations. Great. Thank you.

Jim Anderson

Hans. Yeah. Thanks,

Operator

is question William Vecchi next Blair. Your Alessandra from from

Alessandra Vecchi

maybe on amazing and from dig industrial in little challenging particular. in as segment automotive a quarter To me in Congratulations -- a well a environment. deeper that to an just on extent, the

You -- to the platform Nexus about maybe impact revenue -- thinking based being more be can or broad how from you help strength understand us initial some to that Nexus applications? CrossLink-NX

Jim Anderson

Actually, Alex. question. Thanks, good Yeah.

see been a product year, we within based have that we XXXX, based year saw had And the -- the when following production into that’s year production first, saw, shipments expect and shipments at now this if access of we’d December like you of in recall, CrossLink-NX. and launched continue first full of production we the exactly XXXX. that and time, end So that initial kind we And that is what expectation years. that we to product our ramp was products set Nexus to into first would to last product first late through of about which we

the is it of shipment beginning a And so year. be Nexus contributor marks to or important we platforms this to of CrossLink-NX revenue ramp. us products initial expect production That growth Nexus a because kind for Nexus of milestone really the

mid family the FPGA to The launched we production year And expect our year that we purpose back in that last Nexus Nexus to this based the and was other last general the to later on start that’s year. half revenue technology. this in of Certus-NX in year contribute product would

And see to Nexus it’s yeah, platform that ramp good happening. so, initial

and time to growth all segments to Nexus the really As applicable forward. are it good over contributor so our market of a be that expect to ramps products we moving

Alessandra Vecchi

envelope got these generally, on back the you margin basis these product XX.X%, and the as had about be and getting really to nice now industrial a much us topic further the that’ll the But especially maybe products help can margin How margin margin, for gross front. think levels, the then gross could should understand continues improvement total margin nice, May comms XX% plus, Day. of And as I’m that I’m close on gross really from correctly, what to you’re Analyst to the traction? gain you that you extension can start you we gross And gain impact just to that additional terms sure traction? how in an list just if of have math the doing gross Nexus

Jim Anderson

Certainly. Yeah.

that optimization margin last as target gross for XXXX the May So, target that our margin XX%. I progress out to in we think model Investor we Day. product put we’ve recent That’s pricing made progress or business be ourselves mostly for really out around steady good the there goal, of quarter over And the gross against the driven put reduction. most is at growth XX.X% that And what’s cost -- and margin. to-date

strategy pricing year, in ‘XX to of that’s of reductions product So in optimization strategies those continued that a began strategy expect and early we and have last and put a moving place through continue cost forward. executing we

you’re be gross contribute get expansion. right, But new So help we’ll those margin the that corporate margin. to the to products other our accretive continue will gross margin to to the designed overall are exactly on is

would the well. time as we’ll gross more margin Investor And we May, about upcoming in help drive moving products, Day as our new intention is over that forward. at ramp talk and gross margin those expansion So expectations yeah,

Alessandra Vecchi

Thank I’ll Perfect. to that, it the With next pass person. much. so on you

Jim Anderson

Alex. Thanks,

Operator

Cowen. question next Matt Ramsay from from Your is

Matt Ramsay

Thank much. you Good afternoon. very

huge the of mentioned well visibility and being revenues headwind? the fourth digits much some XX% script, the and you So, in the as And business. challenges, about despite the of quick Jim, consumer the to revenue business COVID a grew segments company double of all you this you wanted improved. around quarter the a ask question double had consumer and the operational consumer guys in quality those -- into two in And I and grew grew main your

we little segment overall as forward the maybe next it of your So basis going in growth are into today? as months could flat, just a you see down, XX you for that the if looking company, about Thanks. up, bit visibility talk a

Jim Anderson

Matt. Thanks, Yeah.

stream in we If the end end -- at we’ve of you nice the -- but a has QX prepared quality to sequentially was from which the Consumer to over And remarks, of look is, in that significantly the to market that QX. that lower then I us And end call a also two stream the short-term I one stabilization That from in up was business. underlying away the shift volatile mentioned for what improved demand headwind market revenue mentioned the see you But been the one happened consumer to at start more to years. last the XXXX, streams what’s reliable revenue transitioning was consumer much did -- pandemic, certainly revenue year of business revenue multiyear stream. combination unexpected is, would more XXXX. in things more mix due a our of year. of revenue a

So typically and like devices, systems high or Prosumer much which higher things typically frankly, lifetimes, more revenue predictable have carry applications, end end a high gross stream. multiyear audio audio margins, are

in So revenue back our the consumer started to stabilize half.

as it expecting moving segment we’ll and expectations forward. more industrial and computing get moving compute. for color and for on more still probably drivers forward. And but us auto consumer to Investor We’re industrial growth we at comms forward, moving the in May auto Day communications see industrial automation But primary or the and be stable and a and much also

May. get more bit Although, and Investor at past headwind see Day that it we’ll consumer has the and a we the -- color don’t so in little providing in same that

Matt Ramsay

I in a which well, to Nexus like guess about, investments the maybe Appreciate an call costs bumped new next takes Sherri, forward? would it. question how making up would what but -- expect, the I you’d OpEx development expect you’re I you’re really any given had and going is products. Again, launch trend analyst rate I a start to the for products, question as but imagine. you as bit the launching with That’s Great. is this thoughts the guess, people No. little helpful. lot the to run Any of OpEx the thoughts now launching puts traveling? pandemic and are Let’s you’re already of of

you. Thank helpful? be would there thoughts any So,

Sherri Luther

thanks Yeah. question. the Sure. Matt, for

we expected in and mentioned we you So our come to that business. reasons the did OpEx higher for QX in invest that our continue as

mode. We are growth in a

So are roadmap. our in we specifically investing product R&D and

at came at spend OpEx at is our XXXX same the QX and of XXXX, in though revenue, note, X.X%. OpEx, came which R&D just XX% target in -- our time, did in about reduced increased Our and by model dollars I’ll we flat while come SG&A X.X% our by versus

that we of really just that’s in continue guide, we a model in -- Day So toward roadmap target we execute continue higher our invest as of in R&D because portfolio as are going out see we product you our to guiding to and mode -- are We put a we more our our our out as again, more revenues. OpEx Analyst OpEx. growth at how forward. of is And in XX% continue example XX% long-term can laid to XXXX

So the continue keep we level. at goal, to OpEx while at the work our towards to trying time, XX% same that target

next quarters So you we about over least think in color that’s that. at give May can certainly our will at Day Analysts more the and how -- guide than in will it

Matt Ramsay

very much. Thanks

Sherri Luther

Thanks, Matt.

Operator

The next is Baird. Gerra from from Tristan question

Tristan Gerra

Hi. I wins see that know server you’ve Good could was or design that computing elaborate are revenue QX little that bit on a ramping? strong. mentioned you afternoon. you Is if wondering the Nexus. I

that the beyond mentioned, driver trying a would cost? impact such also material primary the you’ve you positive expect and have Just see And as impact, the be will upside? when other what Nexus to factors gross pricing a to for margin on

Jim Anderson

up QX Yeah. of we’re Thanks. speaking from from what for QX. a market at basis if sequentially and of look you is Certainly, the on QX, little a end to midpoint our it’s QX. On Q revenue, by bit guide sequential seeing

see mentioned. those computing new and but growth platforms expecting revenue to servers, from again computing from in communications growth we that as client is, sequential We’re also

year. platform we mentioned of in started QX new that last another shipping So

see we’ll So from benefit in that QX.

in industrial growth comms platforms growth well. some and those Again, see we and So growing that benefit of computing we well. that’ll help segment. expect sequential some our with to QX to in new from are the automotive industrial then drive customers some are in as things expecting sequential and like robotics automation as And in

be roughly to revenue. consumer and smallest of component flat IP sequentially, revenue, the expect sequentially, then the We our

to Nexus from continued year, of Nexus We modest impact target but to your margin in sequentially on maybe a well have for a follow its as to I improvement impact from expect wouldn’t margin a this that small would be the gross high QX. I decline I then expect product years for and focused on that question we significant to And -- gross improvements, cost pricing little most decline would in reductions. out. gross on continued this be impact. gross ‘XX part ‘XX. on to margin and would second expect margin Nexus our of QX further as expect optimization year drive Yeah,

Tristan Gerra

security obviously success, color. And had wondering lot the center, hack security up, a which be refreshes timing be brand the into to for existing chip server and chips a for system data of interest is my that Thanks then new server? your can for to Great. just what’s of required follow added if related updated of following driving also the part potential

Jim Anderson

in interest I of our all Yeah, question. our Thanks. lot customers security would of solutions. security in across across we’re market all segments, say is, or definitely seeing Certainly, virtually a Good customers what

software down that the fundamental level are systems from their to about Our level. way customers hardware all making secure, are of all the concerned sure fully the

firmware with brought security now, the seeing make at processing a full FPGA are that software technology so are or pairs hardware way and again, which hardware of to market and fundamental we engagement special lot a Century products level. that like, year, to MachXOXD we the out stack sure brought And platform to momentum. provide stack, a chip our then, their last customers And great securing with also customer that solution good the that

So, is was drive around security engagement -- concern kind around of question. your part certainly, security. their -- the question helping customer of security the of Tristan a second the and of product had And in then our of around the customer second part you the roadmap systems

Tristan Gerra

-- to Yeah. design at MachXOXD try be at be or only can to existing Yeah. the those for to for know going timing refreshes link the new architectures? wins not potential server or it new To chips, look

Jim Anderson

Yes. you. Thank

deployments. are those new a It’s we generally of are retrofitting of those chips of and already retrofitted So so of targeted a opportunity server see don’t would that retrofitting pretty lot services been expect lot don’t primarily deployed. existing -- small. into customers the do been servers We existing

And so vast of would say, the, new from the come growth I will most deployments. of majority

drivers So QX, and revenue see -- of last nicely And ‘XX. customers. in that would of in of we’ve revenue this in QX that’s and our security The in on really focused year’s be -- we’ll because a get we’d year that with and been MachXOXD, that what continue started we production terms we would of growth increased product year the in expect production it the first timing, one ramped that this to it technology, would to in our ramp benefit year. FPGA with this full QX year

Tristan Gerra

useful. much. very you very Thank That’s

Jim Anderson

question. Yeah. Thanks for the

Operator

from Lipacis next Jefferies. Mark from is Your question

open. is line Your

Mark Lipacis

Hi. what existing is my you’re is been to on you’ve software used lock -- the into what customers your it for Lattice Is before, versus and investing what developed stacks? have effectively the in the been better focusing expanding you Thanks question do markets My is it software you that new -- a lot before what extent your you customers job just a on doing was is markets? into to software in the -- for question getting my in understand investing side, you’ve can trying that question. have taking is, software. guys I’m And

Jim Anderson

Mark. Thanks, Yeah.

stacks, and software the So which back just explain. me let step

their level into around So our software stacks making solution really and and we’ve products customers design market very quickly. to higher our it that’s very, system been to easy for get investing in all

focused second -- solutions. can was and Century, one ready-to-go that I security which they with artificial new to the -- our software in was kind as it kind software quickly. And and to we would was stack third of three FPGAs. then stack, get for customers, FPGAs was familiar first was intelligence pre-built, customers our two use and solution to-date, And launched of that types stack, which customer customers sensAI, So tools software stacks are are software as embedded vision -- the we’ve of libraries, platforms the of market mVision, our terms to on characterize very reference

microcontrollers, advantages FPGA, easier to example. And switch solutions that microcontroller And of sticky microcontroller to that and quickly. is, the much of integrated quickly makes system for versus, For our for that or with switch competitor’s And future get other familiar are system in quickly of the and products their just into to FPGAs in competitors very applications. product that to that well. over from a design customers once to software is to designs used find typically some to have then again, is And instance, familiar their artificial as this makes for generation the past very already FPGAs, seeing just get past having are very it already our intelligence are we with product these we’re it customers customers used our are, very used of particularly category this get where historically and products, the interesting terms that solution in and makes software the their is in to market us stack really that our customer a instance, market. easy systems course, customer in us a for

programmed the you’re parallel run an industrial the AI FPGA, network just better inherently inference an IoT at applications and because doing can inference a parallel If the as be algorithms edge and and application, be processor significantly applications, IoT can path, designed time. of they artificial parallel and be can outperform be on the or are can over microcontroller a change reprogrammed or to intelligence data FPGA

get even And quick, stack for customers to just solution so our get benefit to really quickly. again, and makes again that easy that software at it really microcontroller FPGA market customers,

Mark Lipacis

years or like and seems or are way about you’re higher the an having helpful. XX know that that’s adding value. chain, of more be me to value then so specific color. to have kind than of was it speak up logic right of helpful FPGA or it That’s seems product level a And what’s glue of a the Great. your you now, FPGA. -- you on, seems you’re ago, security to Lattice may you a would that a answer And I solution, leads the don’t and of environment about standard kind for think a and not company think years a moving XX years about like -- as or -- it’s like be that that XX and if its part Is like lot prosecuting of last follow that competitive markets the that but think Xilinx right Altera the not if it prosecuting right it’s the application like like now. -- that question very up it’s kind a I seems solutions, it’s Thanks solution to

the now. that way So microcontrollers, opportunities, effectively think -- right is what is -- kind it where of about is what microcontrollers are a your market to right

give could a help helpful? you thinking for us framework about Thanks. that’d us -- be If that,

Jim Anderson

Mark. Thanks, Yeah.

or of glue is architectural part as supplier, just you our I And that’s with logic certainly think that been are people vendors. against we’re -- competing customers. do yeah, call, think against We’re component competing beyond and We part traditional efficient particularly our being now we as a produce. great going in our that but the competitors the because roadmap, of and the space in small power into size space FPGA the targeting we’ve FPGA we’re we well. the against really a solution element not got traditional critical that But, of FPGAs supplier, a

to of security, example that’s We’re platform challenges to tuned to and our our customers, great products, customers. mentioned customers help security, A customers architectural solve very firmware product markets. That’s important business software, really that’s level great very moving that, important forward. both and they’re different really more our hardware that and server security, a for you the in right, and trying but competitiveness across multiple are what challenges example, their security, of more seeing

of out solve added intelligence AI How well figure decision doing software a taken why And customers security making at of FPGAs And market Intelligence the processing all more our we’ve one a the capability. very problem. across fit, edge to are segments system? as fit FPGAs my help and to as trying that it I of network. great do add is on well developed, how so FPGAs known optimized to are example. for that’s of natural power, low to Customers add more we’ve great I technology, do just a top the our are particular, and in Artificial another power our

again, so, but glue software of our not solution with we’re critical provide package, elements systems. customers to architectural some trying our And of just the logic,

applicability competitors that so, our wider but ASPs competed across well. yeah, helping in the is a market, that’s of broadening us microcontrollers compete that one which against the as to is past, example, against And is also would say, range I we’ve

our really the moving around them and solving challenges some that And face forward. customer we’re so focusing it’s but on for us, of making big sure

Mark Lipacis

Thank That’s helps. you.

Jim Anderson

Thanks, Mark.

Operator

Your question Susquehanna. Rolland next from from is Christopher

is line Your open.

Christopher Rolland

I my also guys. that auto our quarter. was echo of there. believe for and want to Industrial congrats for small upside us for the model, you the on auto, Hi, most I

Thanks. mostly if logic driving what’s But us glue it’s more vision, or industrial So any it would to it in But I there more assume is, be color great? if is not could it that’s little perhaps would industrial auto, automation, a is you tell is it there, there. bit fact, right. specifically speak

Jim Anderson

Yeah. Thanks, Chris.

and where we think think results, recent I quarter referring -- I saw… to right, the you’re QX, the most

Christopher Rolland

Yeah.

Jim Anderson

strength industrial bit quite strength of bit yeah, a of auto. a -- in … quite

and that So That so, XX%, definitely we and up industrial. QX, sequentially year-over-year segment. in that’s good saw yeah, is it by by very up X% driven up performance -- in

still a is of segment automotive Our relatively industrial small auto segment. percentage our

the is, But, say, a automotive win we’ve ADAS industrial by Now near-term, opportunity electronics in the our company, infotainment and long-term very of fit do industrial. pipeline. systems healthy for couple yeah, well I design a number a we because into good the things. got what growth like applications recent revenue and see would driven different products performance automotive we’re a seeing And really as is

see we and strength, First in -- market the towards some of the year. general, all, of just end end market the did end

growth was Lattice driven example, drivers customer in from benefited we growth are specific what and is, is I’ll we guess industrial examples robotics. specific So And -- platforms, couple an I give call that But that. different a one by new of a more the is customer platforms ramping. that

-- customers of of to a a industrial automation we were seen prior quick say industrial and applications. would pace tremendous would robotics of very robotics I adoption I We’re a industrial and say with on automation. an amount the from originally the adopt pandemic, really quickening seeing safety our automation say safety and the interest positioned had quicker COVID-XX industrial platforms. experience and new number is I our and that much and customers would pandemic industrial well But to driven we’re industrial maybe a And and than of they anticipated. with of already robotics

-- to safety products our equipment, the used that lapses, like robots could any are at has well if where and devices sure human instance, things applications industrial humans in and shutdown if a workspace robot potential industrial the sees workspace there But also system monitor, both and really and distances safe in are safety positioned Our automation, the be robotics. for same that it’ll our make that. the

in And that And with moving Investor current applications Day in quite that both additional color so about applications growth of that moving pleased forward we’ll those about and see are some May, yeah, forward. segment. the some where give performance in But, we some of yeah, the the we’re QX. at we’re excited applications

Christopher Rolland

us the for then the sequential a demand March? of just the up for in perhaps know if don’t or force could of give a Sherri. kind And I Great. rank Sherri, follow segments you rough idea

Sherri Luther

on is what that the terms for, expected markets, Chris? In color asking our you’re of

Christopher Rolland

The Exactly. sequential Yeah. movement?

color Just on strength? a

Sherri Luther

Yeah.

-- Sure. yeah. Absolutely. So

comms come from industrial So for and to expecting stabilize segment we as automotive, compute expecting IP QX, and that be we’re a that normal down to down, over to that to recall, qX $X expecting that we’ve more $X talked be expecting and consumer between that from you about well, up is to from then to are we’re market if up then per we’re time. IP be range million slightly and our quarter expecting million

the So think you that’s how about next quarter. can

Christopher Rolland

Thanks so and you, thank it Sherri. much, Jim. Appreciate

Sherri Luther

Thanks, Sure. Chris.

Operator

is Your Securities. Derek from next Soderberg Colliers from question

Your is open. line

Derek Soderberg

accounts. roadmap there a The my now. like as products. sounds afternoon. there’s Hi. your Thanks start But questions. start It range guess to see it dynamic ramp taking share the out? as I market that I discussions want playing how to competitors can of had Good goal to I relates new for was existing with new increase competitors, more that customers, wider FPGA to add you’re now and share, starting those you’ve guess to maybe market expectations. products describe with traditional relative you is

Jim Anderson

would say Yeah. Thanks, engagement positive is and very right a the momentum now. I customer Derek. it’s, customer of lot

are computing focused FPGAs you landscape And at traditional center, and I on our the primarily we’re Altera applications. at of formerly the in Xilinx landscape, think for really FPGA look we see complex spectrum. see high end focused for two exactly the making which PSG, is, power data large, competitors, other customers Intel what very when very the

of used be earlier a talked use content can about small, very really top efficient, making just those applications, range of power wide a lot software a I easy very We’re of number that FPGAs, today. to applications on across that

when that they we us with so fresh, our a the else innovative, very portfolio in expanding of And from our customers, see from sit anyone see products customers don’t industry. and

products segments they’re that you to that the in the X them really months, solutions in the us look are important us. them at of think from see and about number that And to they see the other -- the years last they’re see I I They times think that brought say, bringing about. It’s so the in investing of out, products look they XX our the we over say, just and XX thing of three customers excited products roadmap if And out over is, that last, and just were we about years excited ago. number types of four are they front months. the see

customer gain gained there the and out market their we’re moving that’s I momentum last forward. and share in excited roadmap, to And we and the really product trying definitely engagement think share gain. and targeting helping that continuing Lattice they So to We is I portfolio, the believe building in drive serve it. problems think certainly share investing solve about year see we definitely the segment we’re

Derek Soderberg

as wondering shares back my just then And or with the of is for ask this to I you’re so use Great. Sherri I’m looking this buybacks, what team, additional Thanks. plans buybacks $XX cash? follow guess you forward time I buying up, first million. spent on your wanted are

Sherri Luther

the for Thanks Thanks. Sure. Derek. question, Yeah.

buybacks a elements certainly allocation of that. stock one are of perspective, the capital from So

QX on the As That February. we back. execute was -- buyback in in in an shares purchased did you a that million $XX mentioned, expired under authorized program

to we an But we an currently strategy have -- continue move of capital will So forward. look approved it’s as allocation plan now. our that be it buyback element at don’t right we’ll

ratio at came look include deleveraging X.X sheet. leverage balance our the The of other our in strategy elements our allocation at continue capital We’ll to quarter. which that, for

interest earlier to debt could You our payments in we so XXXX that in debt. that our rate mandatory on lock may we lowest accelerated of some recall

be So to interest Tier. continue we rate that lowest at

on on comfortable rate that. the far our a goes that, allocation perspective but product again, will roadmap. investing is evaluate as we’re a really continue level, quarterly top feel that pretty from basis, capital priority at in interest the to lowest really So as And the

evidenced do launches. by increase to That that. continue -- we’ll been in product our cadence it’s So X times our

to from a perspective. prioritize we’ll So continue allocation that capital

Derek Soderberg

Great. Thanks.

Sherri Luther

you. Thank

Operator

question Craig-Hallum. next Richard Your Shannon is from from

open. Your is line

Richard Shannon

questions area. angle early Well, here. even your to for that couple starting a kind tenure that before AI was my and you slightly Lattice had a focus follow of wanted guys to ask, ask Jim thanks, I in different taking question. regarding on

perspective. hardware a from mostly think I

I’d -- You’ve your you’ve name, Anyway could is, it we that’s then love added part right, contributing degree go? to a characterize guess question two of kind the the thus far? can application if where the here even years ago. to far, to got couple about in quantify how I is how my I a stack sensAI success had think sales of enabled, going? think which hear applications the characterization two you to so much do that’s software AI And stack I how or some

Jim Anderson

that say it the fact terms artificial Yeah. definitely processing would an first kind Thanks, solution bringing door us also we’re would for of opener is hardware, put a and intelligence I in all, two of of Richard. in the the is, or I capability -- Yeah. both but buckets inference software customers.

open customers So the the past. with business That’s the door haven’t to definitely to engaged a with that maybe to great we way in and do them. begin

we add customers every are I serve, -- intelligence, have I do market that capability, more would single say, to making that, We systems. looking to my across, again, more more how decision at how

a years, for higher us competitors, solutions And work efficient, been integrating customers that to their software versus or semiconductors, on the for right, customer then component better of an our spend power offer performance, other so their begin that share it’s expanding had many really a that FPGA relationship and had great for initiate for even to opportunity And we share better other past, mentioned other some customer maybe expand expand whether more to systems. to them that share way of haven’t able wallet, suppliers of our that’s the solution, where versus earlier. we’re I in into Lattice we’ve the with to it’s a our

help shareable So us I think existing to expand into it’s with both also new a way but expand way customers. customers, to

Richard Shannon

on for computing. here enough. was one. That’s follow two question that to a in have I success clients wins, within some you’re part question helpful. platforms My your guess starting in Fair Okay.

are well, the do maybe guess could -- that they gross being characterize lower with wins time? you low this starting high you it you First can be average, potentially these one start you things, would -- sounds are I like volume is, see or then share? characterize over as is them PC characterize but than that a my share, great? average like, I of where that’d and point can at guess go Where margins corporate see or And

Jim Anderson

Richard. Thanks, Yeah.

-- computing year, the instance, tremendously the And the big which server of progress that XXX success So, of market, don’t question. client million so and in had the that’s bigger, part for market, TAM. for more we’ve exact for significantly love units it’s look, The the server us in a but lot the and -- unit on computing about TAM. number It’s remember can’t I then huge is market. of great a this or in we thing client the it I numbers know past first the somewhere a

lot client is where computing platform. computing capabilities client And really of so objective a within space grow great the provide a in we can different our to

human how looking we a platform. computing were people a presence can for are We detect at provide artificial detect, secure. makes integration And Just a technology intelligence many can another security is, artificial platform around example about would example. that platform. screen, be, also instance, for just provide a provide that few client capability computing signal intelligence can talking and client aggregation computing ago. few in that can We it client we capability. that We can is assure examples We that minutes

computing for opportunity So we so huge the a a and great the at a company ways as platform look value and client moving lot in different provide forward. can it TAM that we of

those platforms past we year’s we’ve that we’re of new things And platforms this got production our this a years. revenue you imagine, As from computing see and coming more of year customers. into will I we began benefit have and client computing with shared -- did working a full client can in on year as number

is computing of runs gross segments We would computing communications terms that, and of general, and don’t part In communications that. just computing segment. near say sub in our break margins, I client of overall -- the out our in around expect along average, our improving had operate computing corporate over -- time. the our neighborhood margins our towards and our client we corporate applying continue to of been to would gross although, average average with corporate the computing But

Richard Shannon

Thank enough. you, guys. Fair Okay.

Jim Anderson

Richard. Thanks,

Sherri Luther

Richard. Thanks,

Operator

no turn Jim question back would further like this CEO, am Anderson. over I Mr. to call showing at Lattice’s I time. the to

Jim Anderson

about for financial in made progress as the progress We the the XXXX, good as progress, everybody, today. you, that the and both the joining call both we we Thank feel roadmaps. made on terms us well in that hardware thanks, Operator, software of on and

both us. very today, execute we, focused strong As of And Analyst talked really on we our at roadmap business forward that as call. of in Investor we’re course, well look Day on our to product details moment as May. the about strategy, and the we’ve path today’s remain more Operator, very sharing concludes front about customer to we continuing and excited and in have

Operator

participation sir. Thank today’s a conference Thank you, This concludes wonderful for you and call. your day. have

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