UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 12, 2017
Lattice Semiconductor Corporation
(Exact name of registrant as specified in its charter)
Delaware | 000-18032 | 93-0835214 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
111 SW Fifth Ave, Ste 700
Portland, Oregon 97204
(Address of principal executive offices, including zip code)
(503) 268-8000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On October 12, 2017, Lattice Semiconductor Corporation (the “Company”) presented business and financial information at a publicly available webcast meeting (the “Analyst and Investor Meeting”). These presentations included certain preliminary financial results for the third quarter ended September 30, 2017. The Company issued a press release with the preliminary result prior to the Analyst and Investor Meeting, which is filed as an exhibit to this Form 8-K. Final results for this period will be more fully announced in our earnings release and conference call in early November 2017.
Item 7.01. Regulation FD Disclosure.
On October 12, 2017, Lattice Semiconductor Corporation (the “Company”) presented business and financial information at a publicly available webcast meeting (the “Analyst and Investor Meeting”). Attached hereto as exhibits and incorporated by reference herein are the Analyst and Investor Meeting press release and presentation slides. The press release was disseminated prior to the webcast.
During the course of the Analyst and Investor Meeting, the Company’s executives discussed its preliminary business outlook based on current expectations. The presentations include forward-looking statements. A replay of the live webcast may be found at ir.latticesemi.com.
Copies of the press release and the presentation slides are furnished (not filed) as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K. The information in Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being furnished herewith:
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LATTICE SEMICONDUCTOR CORPORATION | |||
By: | /s/ Max Downing | ||
Date: | October 13, 2017 | Max Downing Chief Financial Officer | |
EXHIBIT INDEX
3
Exhibit 99.1
News Release
For more information contact:
David Pasquale
Global IR Partners
914-337-8801
lscc@globalirpartners.com
LATTICE SEMICONDUCTOR TO DISCUSS BUSINESS OUTLOOK AT TODAY’S ANALYST & INVESTOR MEETING
PORTLAND, OR - October 12, 2017 - Lattice Semiconductor Corporation (NASDAQ: LSCC), the leading provider of customizable smart connectivity solutions, announced that it would discuss its preliminary business outlook based on current expectations at the Company’s analyst and investor meeting today at the Shelburne NYC Hotel. A live webcast will begin at 10:00 a.m. EDT today at www.LatticeSemi.com, with a replay available for those unable to attend the presentations in person. The Company plans to release financial results and host a conference call for the third quarter of 2017 in early November.
Darin Billerbeck, President and CEO, commented, “We have a clear pathway to growth and profitability, with stability in our core business as the foundation to build upon. At today’s analyst and investor meeting, we are discussing how Edge of the cloud devices and applications require our Edge connectivity and Edge intelligence solutions. Edge connectivity drives our core business stability and growth today, while Edge intelligence will accelerate our future growth. We remain committed to creating greater shareholder value as we work to deliver increased free cash flow for future investments and to pay down our debt.”
Preliminary Company Business Outlook Based on Current Expectations:
• | Revenue: Revenue is expected to be approximately $91 million to $93 million for the third quarter 2017, approximately $92 million to $97 million for the fourth quarter 2017, and approximately $383 million to $388 million for the full year 2017. |
• | Gross Margin: Gross margin percentage for the third quarter of 2017 is expected to be approximately 56% plus or minus 2%, with gross margin for both the fourth quarter and full year 2017 expected to be approximately 56% plus or minus 2% on a GAAP basis. Gross margin percentage is expected to be approximately 56% plus or minus 2% on a non-GAAP basis for the third quarter of 2017, with gross margin for both the fourth quarter and full year 2017 expected to be approximately 56% plus or minus 2% on a non-GAAP basis. |
1
• | Total Operating Expenses: Total operating expenses, excluding acquisition, impairment and restructuring related charges, amortization of intangibles and stock compensation, are expected to be approximately $45 million to $47 million for the third quarter 2017, approximately $43 million to $45 million for the fourth quarter 2017 and approximately $182 million to $186 million on a non-GAAP basis for the full year 2017. |
• | Full Year 2018: The Company is targeting double-digit annual revenue growth, gross margin percentage at the mid-50% level, operating expenses excluding items noted above at approximately 37% to 38% of revenue and operating income in the mid-to-high teens, with EBITDA of approximately $110 million to $120 million, free cash flow of approximately $80 million to $100 million and a debt reduction of approximately $50 million to $60 million. |
• | Restructuring and Impairment Charges: The Company expects GAAP results for the third quarter 2017 will reflect restructuring charges of approximately $3.5 million to $4.0 million, primarily related to operating expense reduction actions taken. The Company also expects GAAP results for the third quarter 2017 will reflect a non-cash impairment charge of approximately $36 million, related to the Company’s strategic decision to cease future investment in wired ASSP development as it concentrates its resources on higher potential growth opportunities. |
Forward-Looking Statements Notice:
The foregoing paragraphs contain forward-looking statements that involve estimates, assumptions, risks and uncertainties. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Such forward-looking statements include statements relating to: our belief that we have a clear pathway to growth and profitability, with stability in our core business as the foundation to build upon; that Edge of the cloud devices and applications require our Edge connectivity and Edge intelligence solutions; that Edge connectivity will drive our core business stability and growth today, while Edge intelligence will accelerate our future growth; and those statements under the heading “Company Updates Business Outlook” relating to revenue, gross margin, total operating expenses, EBITDA, free cash flow and debt reduction for Q3 2017, Q4 2017 and the full fiscal years 2017 and 2018, and restructuring and impairment charges for Q3 2017. Other forward-looking statements may be indicated by words such as “will,” “could,” “should,” “would,” “may,” “expect,” “plan,” “project,” “anticipate,” “intend,” “forecast,” “future,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms or other comparable terminology. Lattice believes the factors identified below could cause actual results to differ materially from the forward-looking statements.
Estimates of future revenue are inherently uncertain due to, among other things, the high percentage of quarterly “turns” business. In addition, revenue is affected by such factors as global economic conditions, which may affect customer demand, pricing pressures, competitive actions, the demand for our Mature, Mainstream and New products, and in particular our iCE40™ and MachXO3L™ devices, the ability to supply products to customers in a timely manner, changes in our distribution relationships, or the volatility of our consumer business. Actual gross margin percentage and operating expenses could vary from the estimates on the basis of, among other things, changes in revenue levels, changes in product pricing and mix, changes in wafer, assembly, test and other costs,
2
including commodity costs, variations in manufacturing yields, the failure to sustain operational improvements, the actual amount of compensation charges due to stock price changes. Any unanticipated declines in revenue or gross margin, any unanticipated increases in our operating expenses or unanticipated charges could adversely affect our profitability.
In addition to the foregoing, other factors that may cause actual results to differ materially from the forward-looking statements in this press release include global economic uncertainty, overall semiconductor market conditions, market acceptance and demand for our new products, the Company's dependencies on its silicon wafer suppliers, the impact of competitive products and pricing, and technological and product development risks. In addition, actual results are subject to other risks and uncertainties that relate more broadly to our overall business, including those risks more fully described in Lattice’s filings with the SEC including its annual report on Form 10-K for the fiscal year ended December 31, 2016, and Lattice’s quarterly reports filed on Form 10-Q.
You should not unduly rely on forward-looking statements because actual results could differ materially from those expressed in any forward-looking statements. In addition, any forward-looking statement applies only as of the date on which it is made. The Company does not intend to update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
About Lattice Semiconductor:
Lattice Semiconductor (NASDAQ: LSCC) is a leader in smart connectivity solutions at the network edge, where the “things” of IoT live. Our low power FPGA, 60 GHz millimeter wave, video ASSP and IP products deliver edge intelligence, edge connectivity, and control solutions to the consumer, communications, industrial, compute, and automotive markets. Our unwavering commitment to our global customers enables them to accelerate their innovation, creating an ever better and more connected world.
For more information about Lattice please visit www.latticesemi.com. You can also follow us via LinkedIn, Twitter, Facebook, YouTube, WeChat, Weibo or Youku.
# # #
3
Analyst & Investor Day
October 12, 2017
Stability & Growth
at the Edge of the Network
NASDAQ: LSCC
Exhibit 99.2
[2]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com [ ]
WELCOME
David Pasquale, Global IR Partners
[3]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Welcome
David Pasquale, Global IR Partners
Leading at The Edge
Darin Billerbeck, President & CEO
Executing & Winning at The Edge
Glen Hawk, COO
Driving Growth & Improving Profitability
Max Downing, CFO
Product Demonstrations Introduction
Lattice Marketing
Q & A
Lattice Management
Product Demonstrations & Lunch
Lattice Marketing
Agenda
Darin Billerbeck
CEO
Glen Hawk
COO
Max Downing
CFO
[4]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Safe Harbor
This presentation contains forward-looking statements that involve estimates, assumptions, risks and uncertainties, including statements
relating to our belief that Edge connectivity will drive solid base business growth, that Edge intelligence will accelerate future growth, that
stability and growth will drive solid financial returns, that the Lattice opportunity doubles to $2 billion by 2022 with Edge computing and
statements relating to our financial outlook for Q3 2017, Q4 2017, fiscal 2017 and our fiscal 2018 financial model, including estimates
regarding revenue, gross margin, operating expenses, EPS, EBITDA, debt reduction, leverage ratio, free cash flow, cash flow and liquidity.
Lattice believes the factors identified below could cause our actual results to differ materially from the forward-looking statements.
Factors that may cause our actual results to differ materially from the forward-looking statements in this presentation include global economic
uncertainty, overall semiconductor market conditions, market acceptance and demand for our new and existing products, the Company's
dependencies on its silicon wafer suppliers, the impact of competitive products and pricing, and technological and product development risks.
In addition, actual results are subject to other risks and uncertainties that relate more broadly to our overall business, including those risks
more fully described in Lattice’s filings with the SEC including its annual report on Form 10-K for the fiscal year ended December 31, 2017 and
our quarterly filings on Form 10-Q.
Certain information in this presentation is identified as having been prepared on a non-GAAP basis. Management uses non-GAAP measures
to better assess operating performance and to establish operational goals. Non-GAAP information should not be viewed by investors as a
substitute for data prepared in accordance with GAAP.
You should not unduly rely on forward-looking statements because actual results could differ materially from those expressed in any forward-
looking statements. In addition, any forward-looking statement applies only as of the date on which it is made. The Company does not intend
to update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
[5]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com [ ]
LEADING AT THE EDGE
Darin G. Billerbeck, President & CEO
[6]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[7]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[8]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
EdgeCloud
[9]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[10]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[11]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[12]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[13]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
C
O
M
M
S
Other FPGA Vendors DATA CENTER
CONSUMER
CLOUD
MOBILE
[14]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
C
O
M
M
S
Other FPGA Vendors DATA CENTER
CONSUMER
CLOUD
EDGE
[15]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[16]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[17]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[18]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[19]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
[20]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge connectivity
drives stable base
business growth
Edge computing
accelerates future
growth
Stability & growth
drive solid financial
returns
Lattice Semiconductor
Pathway to Growth and Profitability
EDGE
CONNECTIVITY
EDGE
COMPUTING
FINANCIAL
GROWTH
$
[21]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com [ ]
EXECUTING AT THE EDGE
Glen Hawk, COO
[22]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
CONTROL1
CONNECT2
COMPUTE3
[23]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
0
100
200
300
400
500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
A
n
n
u
a
l Re
v
e
n
u
e
($M
)
Decades of Leadership for Stability
Control
Stability
Control, Connectivity and Computing for Edge Intelligence
Control PLDs
Financial Stability
Edge Incumbency
[24]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
0
100
200
300
400
500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
A
n
n
u
a
l Re
v
e
n
u
e
($M
)
Edge Connectivity for Growth
Control, Connectivity and Computing for Edge Intelligence
Control Connectivity
Growth
Edge Connectivity
Proven Growth Driver
Leveraging Acquisitions
Control PLDs
Financial Stability
Edge Incumbency
[25]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing for the Future
Control, Connectivity and Computing for Edge Intelligence
0
100
200
300
400
500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
A
n
n
u
a
l Re
v
e
n
u
e
($M
)
Control Connectivity Compute
Edge Computing
Future Growth Driver
New Market Needs
Existing Lattice Products
Edge Connectivity
Proven Growth Driver
Leveraging Acquisitions
Control PLDs
Financial Stability
Edge Incumbency
[26]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
CONTROL1
CONNECT2
COMPUTE3
[27]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Control Products for Board Management
Lattice Control PLD Solutions
c.2012 Server Motherboard
Lattice Solution: MachXO2, ~100 I/O Lattice Solution: MachXO3, ~300 I/O
c.2017 Server Motherboard
[28]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Control Products for System Management
Lattice Control PLD Solutions
c.2012 Single Motor control
Lattice Solution: MachXO2 Lattice Solution: MachXO3, Lattice XP2
c.2017 Industrial Robotics
[29]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Control Products Establish Stable Revenue Base
Long Design Cycles and Longer Production Windows
$0
$50
$100
$150
$200
$250
$300
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
C
o
n
tr
o
l A
n
n
u
a
l
R
e
ve
n
u
e
(
$
M
)
Customers trust Lattice for stable supply of high quality products
Designs won prior to 2006
Designs won in 2007
Etc.
[30]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Control Products Establish Stable Revenue Base
Over 4,000 Customers in 2016
Optimized Sales Channels
Supporting broad customer
base with unique requirements
Design-in Support
Deep systems expertise
enables customer innovations
Edge Incumbents
Lattice was already there
2016 Revenue Distribution by Customer
[31]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
CONTROL1
CONNECT2
COMPUTE3
[32]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Our Direction Towards the Edge
SMART CITY
SMART
FACTORY SMART CAR
SMART
HOME
Mobile Influenced
Cloud WaterfallFinFET technology choice
Doubling down with FDSOI
Accelerated with Acquisitions
Other FPGA Vendors
MOBILE
CLOUD
[33]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Mobile Influenced Edge Connectivity
Lattice’s iCE FPGA Design Wins
LingLong DingDong
HTC VIVE
Amazon Dot
[34]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Mobile Influenced Edge Connectivity
Lattice’s CrossLink FPGA Design Wins
ADAS, INFOTAINMENT SURVEILLANCE
MACHINE VISION TABLETS
[35]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Wireless Edge Connectivity
Essential Phone Design Win
SB6212CZU
Snap wireless
connector
Source: www.ifixit.comSource: www.essential.com
[36]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Wireless Edge Connectivity
TPCAST Design Win – Immersive Wireless VR Enabled by Lattice Portfolio
WiHD Rx Module
SiI9396 LatticeECP3
WiHD Tx Module
LatticeECP3
SiI9396
iCE
[37]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
CONTROL1
CONNECT2
COMPUTE3
[38]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing & Machine Learning
Traditional
Computing
Neural Computing
- Convolutional Neural Network (CNN)
- Binary Neural Network (BNN)
[39]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing Applications
Wide Range of Requirements
Face
detection
Smartphones
Wearables
<10 mWs
<$1
~1 BOPS
Speech
recognition
Smart
speakers
AR/VR
<500 mWs
<$3
~10 BOPS
License plate
recognition
Surveillance
cameras
Drones
<1W
<$5
~100 BOPS
Fault
detection
Machine
vision
Robotics
<3W
<$10
~1,000 BOPS
Collision
avoidance
Automation
Levels 3,4,5
>10W
>$20
>10,000
BOPS
Applications
End Devices
Power
Price
Performance
MOBILE SMART HOME SMART CITY SMART FACTORY SMART CAR
[40]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing Differentiation
Lattice Advantage for Neural Networks and Machine Learning
Programmable
Neural Network
Acceleration.
1 Tera Ops under
1W
HIGH-END FPGA
ZONE
GPU
ZONE
MPU
ZONE
MCU ZONE
LATTICE
ZONE
0.1 1 10 100 1,000 10,000 100,000
PERFORMANCE (Billions of Neural Ops per second)
100.0
10.0
1.0
0.1
0.01
P
O
W
E
R
(W
)
[41]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing Enablement
Lattice’s Energy Efficient Neural Network Acceleration
Convolutional Neural Network
Based Face Tracking
Binarized Neural Network
Based Face Detection
<1W on ECP5 <5mW on iCE40 UltraPlus
[42]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing Design Win Examples
Existing Product Capability Ideal for Emerging Requirements
360o Surround
View ADAS
License Plate
Detection
AR/VR Positional
Tracking
[43]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Human Computer Interaction Demonstration
Leveraging Investments to Deliver More Advanced Edge Computing Solutions
10X Richer Data
Capture User Intent
Lower Latency by 90%
No Perceivable Lag
<1ms Latency
>1,000Hz Sampling
[44]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
CONTROL1
CONNECT2
COMPUTE3
[45]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
The Edge Intelligence Opportunity
Serviceable Available Market Expected to Double by 2022
Control
Connectivity
Compute
2017 2022
0.5
1.0
1.5
2.0
S
A
M
(
in
$
B
)
Lattice
Opportunity
Doubles to Over
$2B with Edge
Computing
Source: IHS Markit, IDC, Lattice
Lattice Leads
in Edge
Connectivity &
Control
[46]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge connectivity
drives stable base
business growth
Edge computing
accelerates future
growth
Stability & growth
drive solid financial
returns
Lattice Semiconductor
Pathway to Growth and Profitability
EDGE
CONNECTIVITY
EDGE
COMPUTING
FINANCIAL
GROWTH
$
[47]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com [ ]
DRIVING GROWTH &
IMPROVING PROFITABILITY
Max Downing, CFO
[48]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
3Q17E
$91M - $93M
56% +/-2%
$45M - $47M
2017 Outlook
4Q17E 2017E vs. 2016
$92M - $97M
56% +/-2%
$43M - $45M
$383M - $388M
56% +/-2%
$182M - $186M
Down 9 - 10%
Above Model
Improved by
8 - 10%
Revenue
OpEx*
GM
3Q17 Earnings Call in Early November
*Non-GAAP
[49]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
P&L Financials Model
Revenue In Line with Market CAGR
Gross Margin 55%
OpEx* 35% of Revenue
Operating Income* 20% of Revenue
EBITDA $110M - 120M
Free Cash Flow $80M - 100M
Financial Model
2018
Double Digit Growth
Mid 50’s
37-38% of Revenue
Mid to High Teens
Triple Digits
~20% in Debt Reduction
*Non-GAAP
[50]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Core Business
Revenue Mix
Stable Revenue From Base
Handsets
Image,
Licensing,
Services
2012 2013 2014 2015 2016 2017E
Core
2015 - 2017 * Based on Company Estimates
*
[51]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
60% 61%
52%
49%
46%
2013 2014 2015 2016 1H17
Diversified Customer Base Provides Stability
Customer Diversification
1
CUSTOMER
2
CUSTOMERS
1
CUSTOMER
10% Customer
Count
% of Revenue from
Top 20 Customers
[52]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 1H17
Communications & Compute Industrial & Automotive Consumer
Diversified Markets for Stability and Growth
PLD CAGR*
2016 – 2021
Consumer +6%
Industrial +10%
Automotive +11%
Communications +0%
Compute +6%
*IHS Markit WW Semi Shipments Q2’17
Product Revenue by Market
Co
n
tr
o
l
E
d
g
e
Co
n
n
e
cti
v
it
y
E
d
g
e
Co
m
p
u
ti
n
g
[53]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
40%
50%
60%
70%
2013 2014 2015 2016 1H17
High Qtr Low Qtr Annual
Executing to Gross Margin Model
F
in
a
n
cial
M
o
d
e
l T
a
rg
e
t
M
id
5
0
’s
Lattice Gross Margin
GM Range
Consumer 40% - 50%
Comms & Compute 50% - 60%
Industrial & Auto 65% - 75%
IP & Services 85% - 95%
[54]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
2014 2015 2016 2017E 2018E
R&D SG&A
Significantly Reducing OpEx
Growth Plans Achievable with This Level of Spending
Headcount actions taken
& other actions well
underway
Reductions indexed to
base business
New product
investments funded
8%
8-9%
7-9%
Lattice OpEx** ($M)
* Based on Company Estimates
**
**Non-GAAP
[55]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Improving Liquidity & Cash Flow
Priority #1 is to Pay Down the Debt
0.00
1.00
2.00
3.00
4.00
5.00
6.00
$0
$50
$100
$150
$200
$250
$300
2015 2016 2017E 2018E
$
in
M
Net Debt EBITDA Free Cash Flow Leverage Ratio
Net Debt = debt minus cash
2018 Expectations
Triple digit EBITDA
Enables $50M to $60M
in debt reduction
Improved leverage ratio
**
* Based on Company Estimates
[56]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge connectivity
drives stable base
business growth
Edge computing
accelerates future
growth
Stability & growth
drive solid financial
returns
Lattice Semiconductor
Pathway to Growth and Profitability
EDGE
CONNECTIVITY
EDGE
COMPUTING
FINANCIAL
GROWTH
$
[57]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com [ ]
DEMONSTRATIONS
EDGE CONNECTIVITY
Lattice Marketing
[58]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Connectivity – Bridging & Aggregation
Abdullah Raouf
[59]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Connectivity
IoT Sensor Bridging & Aggregation
Concurrent sensor data required
Single processing engine systems
Pins are exponentially increasing
SoC costs
Time Division Multiplexing –
Multiple Packets
I2C
UART
PDM
SPI
I2C
GPIO
GPIO
GPIO
Serialized Data
I2C
UART
PDM
SPI
I2C
GPIO
GPIO
GPIO
I2C UART PDM SPI I2C
Source: Postscapes, and Harbor Research
POGO Pin
FlexPCB
Board A Board B
POGO Pin
FlexPCB
Board A Board B
Many pins increase cost and
compromise performance
Fewer pins ensure high
performance and lower cost
Board A Board B Board A Board B
[60]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Connectivity
Demo Overview: Production Design Wins
LingLong
DingDong
Amazon Echo Dot
(1st battery powered enabled Echo)
Samsung Galaxy Note8
Customer Needs
Concurrent sensor data
Single processing engine support
SoC pin reduction
Lattice Capability
Time-to-market (quick turn design in weeks)
Low power “always on” routing
Small PCB area (~2 mm x 2 mm)
[61]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Wireless Connectivity
Abdullah Raouf
[62]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Short Range Data Transfer (12 Gbps @ mm distance)
Because connectors wear out
Because connectors limit the design
Because consumers demand elegance
Edge Connectivity
10 mm5 mm
Snap Wireless Connector Replacement
[63]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Connectivity
Demo Overview: Snap Wireless Connector
World’s 1st 12 Gbps wireless connector
Traditional USB without the wires
For an upgradeable phone with elegance
Solution Details
SB6213
USB Host
USB 2.0/3.0
6 Gbps
(full duplex)Smartphone Accessory
USB 2.0/3.0
I2C I2C
USB
DeviceSB6212
Lattice’s SiBEAM Snap technology delivers USB across
a wireless connection in Essential’s Click Connect
[64]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
2K Wireless Video Transmission
using Lattice’s
Edge Connectivity
Full Stack FPGA & Wireless VR Solution
HUNDREDS OF METERS
Real-time Hand & Head TrackingWireless VR Without Lag
Specialty Sensor Hub Processor
Specialty
Sensors
Processing
Unit
Concurrent
Sensor Acquisition +
Time Stamping
(iCE40 families)
Wireless connection to removes
cable between PC & Head
Mount Display
[65]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Connectivity Portfolio
Demo Overview: TPCAST & HTC
LatticeECP3
WiHD Rx Module
SiI9396
SiI9396
LatticeECP3
WiHD Tx Module
iCE40
Wireless video transfer with
Lattice’s WiHD
Signal aggregation
with Lattice’s iCE40
Video connectivity
with Lattice’s HDMI 2.0 &
LatticeECP3
[66]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Wireless Connectivity
Peiju Chiang
[67]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Wireless Connectivity
Lattice Capability
Lattice’s SiBEAM
electronic beam-steering
technology reduces the
lifetime cost of wireless
networks
Lattice’s GigaRay
module sets offer high
performance and are
simple to integrate
GigaRay Wireless Infrastructure
N
e
tw
o
rk
P
ro
c
e
s
s
o
r
PCIe
Flash
SiI6342
60 GHz RF
TransceiverSB6541
Baseband
FPC
Half Height
PCI Express
Mini Card RF Module
Customer Needs
Increasing data demand drives
the need for capacity
mmWave wireless offers
gigabit speeds and is flexible
and cheap compared to fiber
[68]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Wireless Infrastructure
High Performance
• Up to 200 m @ 1 Gbps
• Up to 300 m @ 300 Mbps
• 90
o
horizontal steering range
Easy Integration
• PCIe card
• Linux driver
Regulatory Certification
Demo Overview: Just-Tone Wireless Node
[69]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com [ ]
DEMONSTRATIONS
EDGE COMPUTING
Lattice Marketing
[70]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Embedded Vision & Machine Learning
Deepak Boppana
[71]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
3D Depth Mapping with Wireless Connectivity
Obstacle
avoidance
and remote
surveillance
Unique combination of
energy efficient computing
with ECP5 and wireless
connectivity with WiHD
ECP5
CSI-2
Two RGB
streams
CSI-2
Image
Rectification
Depth Map
Generation
DDR3 SDRAM
CrossLink
Robot Controller
Obstacle Avoidance
Program
Closest
distances
Depth map
video WirelessHD
Transmitter
[72]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
Demo Overview: 3D Depth Mapping with Wireless Connectivity
Embedded
Vision Kit
WiHD Tx
Module
Obstacle Avoidance using Depth Map
• Depth map generation from stereo images
System Specification
• Embedded Vision Kit
− Stereo camera
− Depth map generation in ECP5
• WirelessHD Tx/Rx modules
• LEGO Mindstorms EV3 robotics kit
Features
• Input: 1080p @ 60 fps stereo video
• Output: 320 x 240 @ 60 fps depth map with
64 depth levels
• Obstacle detection based on minimum distance
and collision avoidance
• Less than 1 W of power consumption in ECP5
[73]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
Indicates where face is
in image
Programmable, energy
efficient neural network
acceleration with ECP5
Face Tracking with ECP5
ECP5-85
NN Accelerators
8 engines
Overlay
Engine
DDR Memory
SPI to DDR loader
SPI
Memory
ISP
Engine
[74]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
Implementation
• ECP5-85 with 8 NN engines
− Fits in smaller device with some tradeoffs
• Network – LatticeNET2
− 90 x 90 RGB Input
− 8 convolution layers
• Standalone – operates at power up
Key Features
• Runs @ 14 fps (could be 200 fps with 32 x 32 RGB)
• Total ECP5 power is 0.85 W
Yellow box indicates
location of the face
Demo Overview: Face Tracking with ECP5
[75]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
Face Detection with iCE40
Solution Description
• Live stream video capture data is searched real-time for a face
Use Case
• Always on camera
− Wakes AP for facial detection only when face is looking at
phone
− AP can perform detail high power facial recognition
Lattice Value
• Small size (2.2 x 2.6 mm)
• Low power
• Single chip solution
iCE40 parallel
(13 pins)
RISC-V with
Accelerators
FLAG
640x480
@ 30 fps
Down Sample
640x480 to 40x30
200 LUTs / 2 EBR
Camera I/F
100 LUTs
[76]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
Demo Overview: Face Detection with iCE40
Green LED indicates
face detected
Indicates if face is present
• LED indicates face in field of view of the camera
Implementation
• iCE40 with 2 BNN engines
• Network – BNN
− 32 x 32 RGB Input (after downscaling)
− 6 convolution and 3 Max-Pooling steps
• Standalone – operates at power up
Key Stats
• Lowest power solution in the market
− Total FPGA logic power is 4.4 mW + image sensor
• Smallest solution: 2.15 x 2.55 mm package
[77]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Human Computer Interaction (HCI)
Jim Tavacoli
[78]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Edge Computing
HCI: Enabling Immersive AR / VR User Experiences
Parallel Sense & Compute
Enables Lowest Latency & Highest Raw Data
Solution Overview
Fastest Response
Capture User Intent
Market Needs
DAC
DAC
D
A
C
D
A
C
[79]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Full 3D Hand Model
Slash hardware &
software latency to equate
physical response
Device Hand Skeletal
Tracking
Enable 3D sight all around
a device in near real-time
Value to Developer
Key Differentiators
Edge Computing
Sense Hand as a
Precise 3D Model
Sense fingertips and
hands as a precise
3D model
Demo Overview: HCI / Sense in 3D
Physical World Virtual World
[80]Lattice Semiconductor (NASDAQ: LSCC) - Questions? Email LSCC@globalirpartners.com
Q&A
Stability & Growth at the Edge of the Network
Lattice Management
Questions? Email LSCC@globalirpartners.com
Analyst & Investor Day
October 12, 2017
Stability & Growth
at the Edge of the Network
NASDAQ: LSCC