stockrowWhat it does
Lattice Semiconductor develops programmable chips, software and other technology for equipment makers. It is headquartered in Hillsboro, Oregon, and led by President and CEO Ford Tamer.
Its main products are field programmable gate arrays, or FPGAs. Unlike a chip built for one fixed function, an FPGA can be configured by a customer using software. Lattice focuses on small, low-power devices that can control or connect other components, process data and provide hardware security.
Customers use its chips in products ranging from data-center servers and communications equipment to factory systems, vehicles and consumer devices. An FPGA can work alongside a main processor, for example, to manage a server’s power and security or connect sensors in an industrial system. Lattice also provides design software, intellectual property and application-specific solutions that help customers incorporate the chips into their products.
The company operates primarily without its own semiconductor factories. It designs products and relies on outside manufacturers to make, assemble and test them. It sells through distributors as well as directly to equipment makers.
Lattice completed its acquisition of AMI in 2026. AMI adds firmware and infrastructure-management capabilities, and Lattice has introduced joint chip-and-firmware solutions for data centers.
How it makes money
Lattice earns money principally by selling semiconductor products, both through distributors and directly to customers. It also generates revenue from technology licenses, patent sales, royalties and design services. Its product families serve three end-market groups: Communications and Computing, Industrial and Automotive, and Consumer.
The chip portfolio includes small FPGAs for functions such as control, security and video connectivity, and mid-range FPGAs for applications requiring more logic capacity. Nexus and Nexus 2 are small-FPGA platforms; Avant is a mid-range platform. Customers can use Lattice’s software, IP cores, reference designs and development kits when designing its chips into equipment. Lattice also sells legacy video connectivity chips but is not developing new products in that area.
Licensing can produce upfront payments and ongoing royalties. Lattice participates in licensing consortia for HDMI and MHL technologies, licenses some IP cores for use in customers’ own chips, and may sell patents with potential future royalties. It also performs customer design projects.
AMI’s revenue is primarily driven by firmware licensing, recurring maintenance and subscriptions, and per-unit royalties. The company introduced AMI Rack Manager and joint FPGA-and-firmware solutions after the acquisition. AMI contributed $39.0 million of revenue in Q3 FY2026.
Total revenue increased in fiscal 2025 from fiscal 2024. Lattice negotiates prices and volumes with manufacturing partners, while sales to most distributors allow certain price adjustments and limited product returns.
Customers and how it sells
Lattice’s end customers are primarily original equipment manufacturers. In communications and computing, they use its products in servers, client devices, wireless infrastructure, switches and routers. Industrial and automotive applications include factory automation, robotics, machine vision, driver assistance and infotainment. Consumer applications include smart-home devices, projectors, wearables and other electronics.
Independent distributors are an important route to those customers. They handle sales, order fulfillment and inventory, and provide technical support. Lattice also sells directly and through manufacturers’ representatives, supported by its own sales and field engineering teams.
Distributors accounted for 84.0% of fiscal 2025 revenue. Distributor B represented 38.0% and Distributor A represented 31.0%. Lattice assigns geographic revenue according to customers’ ship-to locations, which may differ from where a product is ultimately used.
China accounted for $273.2 million, or 52.2%, of fiscal 2025 revenue. The Americas contributed $102.8 million, or 19.6%, and Europe contributed $66.8 million, or 12.8%. Other Asia contributed $51.9 million and Japan $28.6 million. Both foreign and domestic sales are denominated in U.S. dollars.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| CHINA | $273.2 million | 52.2% | 32.4% |
| Americas | $102.8 million | 19.6% | 1.52% |
| Europe | $66.8 million | 12.8% | −11.4% |
| Other Asia | $51.9 million | 9.91% | 14.4% |
| JAPAN | $28.6 million | 5.47% | −64.7% |
Suppliers and costs
Lattice’s fabless model avoids the fixed cost of owning and operating manufacturing facilities. It buys finished silicon wafers from foundry partners and uses outside suppliers for assembly, testing, warehousing and other supply-chain work.
United Microelectronics and its subsidiary United Semiconductor Japan manufacture products on several process technologies. Samsung manufactures the technology used in the Nexus platform, while Taiwan Semiconductor Manufacturing Company manufactures technology used in Avant and Nexus 2, as well as other products. Seiko Epson also manufactures products for Lattice. The company negotiates wafer volumes and prices with its foundry partners periodically.
Advanced Semiconductor Engineering is the primary outsourced assembly and test supplier. Amkor is another qualified assembly partner, and Lattice uses a second source where volume and customer requirements make it necessary. Assembly by those partners takes place in Asia.
Beyond manufacturing, costs include research and development staff, engineering wafers, equipment, software licenses and outside engineering services. Lattice expects R&D expense to increase in the future but decline as a percentage of revenue.
The company has secured what it considers the right level of supply for multiple years. It is also passing supplier cost increases and expedite fees on to customers and is building internal inventory to support expected growth.
- Revenue$523.3M
- Cost of revenue−$166.3M
- Research and development−$188.0M
- Selling, general and administrative−$153.6M
- Other operating costs−$4.1M
- Operating income$11.2M
Competitive position
Lattice competes with other FPGA suppliers and, depending on the application, with makers of fixed-function chips and microcontrollers. Its chips can also work alongside those devices rather than replace them. Altera competes in FPGA development tools; Lattice says Altera announced its AI-assisted tools after Lattice announced its own.
The company’s product strategy centers on low power consumption, small size and ease of use. Its programmable devices let customers change logic through software, while Lattice supplies design tools, IP cores and application-specific solution stacks. Lattice says it is gaining share in small FPGAs, without providing a market-share figure.
Our reading: The combination of chips and design tools offers some protection because customers use them together when developing products, but the evidence does not establish how costly it is to switch suppliers.
Lattice supports long-standing device families and has a commitment to product longevity. It also pursues multi-generational design wins with equipment makers and provides technical support through its own engineers and distributors. Our reading: Long product support and customer design relationships can help retain business, though the company still has to win new designs.
Lattice holds patents and licenses technology through industry consortia. Our reading: Its IP portfolio supports both products and royalties, but the company does not consider its business materially dependent on any particular patent or license.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Altera | FPGA development tools | Medium |
Growth opportunities
Lattice’s growth plans span data centers, communications infrastructure, industrial automation and edge AI. Its FPGAs can perform control, connectivity and security functions in servers, and can connect and process information near sensors in factories, vehicles and other devices.
Fiscal 2025 revenue increased from fiscal 2024. Communications and Computing revenue increased, driven primarily by data-center and wireline networking demand, while Industrial and Automotive revenue decreased amid softer demand and customer inventory normalization. In Q3 2026, FPGA revenue grew year over year, with growth in both computing and communications and industrial and embedded products.
The company expects AI-related revenue to grow over the next few years as design wins develop across its end markets. It has also launched Lattice Prompt, an AI-assisted development tool, and introduced a small-FPGA family for secure control. Following the AMI acquisition, it launched joint offerings for rack boot, security retrofit, deployment, and power and cooling management.
Lattice expects revenue growth in 2027 and beyond. Its expectations include a full year of AMI, data-center demand and new industrial design wins. The company estimates server units at about 20,000,000 in 2026. Backlog is not historically a reliable predictor of future sales because orders can generally be revised or canceled and some products are ordered and delivered within the same quarter.
- $515.3MFY2021
- $660.4MFY2022
- $737.2MFY2023
- $509.4MFY2024
- $523.3MFY2025
- $1.0BFY2026 guidance
Structural risks
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Distributor concentration. Lattice depends on a highly concentrated distribution model to reach end customers. Distributors also manage fulfillment and inventory, and sales to most distributors permit certain price adjustments and limited returns.
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Manufacturing and geopolitical exposure. The company relies on subcontractors for wafer fabrication, assembly and testing. Its subcontractors’ locations expose supply to geopolitical risks, and successful product introductions depend on foundry capacity, acceptable yields and access to packaging.
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Cyclical demand and inventory. The semiconductor industry experiences cyclical market patterns, and Lattice serves several end markets. Purchase orders can generally be revised or canceled, while changes in demand or technology can require inventory write-downs that reduce gross margin.
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New-product execution. Growth depends on completing designs on time, winning customer designs, obtaining production capacity and achieving acceptable costs. It also depends on customer acceptance of new features and the availability of supporting software tools and field engineers.
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Licensing volatility and indebtedness. The IP licensing business can cause revenue and margins to fluctuate. Lattice’s debt and its terms could limit additional borrowing and financial flexibility, while cash flow may be allocated to debt payments rather than operations or growth.
Bottom line
Our reading
Our reading: Lattice combines programmable chips with software, IP and, after the AMI acquisition, firmware for customers building connected and computing equipment. Its prospects depend on turning design wins and data-center demand into product sales while maintaining supply. Distributor concentration, outsourced manufacturing and cyclical customer demand remain material exposures, even as licensing and subscriptions add recurring revenue.