Lattice Semiconductor Corp J.P. Morgan 54th Annual Global Technology, Media and Communications Conference

Thank you. When I joined, the vision of the company was to do a full portfolio of FPGA all the way from low-end to high-end, and there was a roadmap to do chips with, you know, millions of gate and including SoC, which is integrating the processor inside the FPGA. When I joined, we refocused the company on the small and mid-range, no SoC. Meaning we refocused the company on what's called the small FPGA is called our Nexus product line, N-E-X-U-S, and our mid-range is Avant. We have three product line, what we call the pre-Nexus, Nexus and Avant. Nexus, it goes up to about 200,000 logic cell, Avant to about, you know, 600, and that's the focus of the company.

We did this because our belief is that this is a sweet spot for FPGA. This is where, you know, FPGA make a lot more sense being deterministic, being low power, being low latency, being fast boot time, as a companionship to our silicon partner on the CPU, on the GPU, on the board management controller, on the MPU and MCU, on the networking switch and NIC, on the variety of different sensors. On the sensor, we sit near a image sensor. Let's say we've got partners like Sony on the radar. For example, we announced a partnership with TI.

We've got a variety of sensor work with ADI, so image, LiDAR, radar, infrared, ultraviolet, as well as, you know, all kind of industrial sensor, like temperature and then a variety of motor control, so different actuators. We feel this is the sweet spot for FPGA. We're a high volume supplier, this year we'll do over 200 million units, on our way to over 250. This is our focus. What's different is we don't try to go after these large FPGA or the millions of gate, you know, where in my background when I was at Broadcom and eventually Inphi on board of Marvell.

I saw these large FPGA going in for 18 months and being replaced with ASIC because they're very high power, very expensive. What we do is the small FPGA. We're literally on a rack of server today. We went from tens of FPGAs per rack to hundreds of FPGAs per rack. Very low cost, very cost effective, very fast boot time. On the SoC, we go partner with folks like NXP or ST or Renesas, where we instead of trying to put the processor inside the FPGA, and then you're stuck with designs our competitors like, you know, Altera and Xilinx have these SoC that are 10, 12, 15 years old, with really old interfaces and et cetera. We go partner with the latest and greatest from NXP and ST and Renesas, where we go jointly to market.

What we show, like, for example, we go partner on industrial control and humanoids, where together we're gonna have the best of both worlds. You end up with the best deterministic low latency from an FPGA and the best, you know, latest tool set, the latest DDR, the latest PCI from a NXP. Together, we're actually gonna bring a solution that's lower latency, lower power. It's counterintuitive. You put two of us together, we're together lower power because deterministic tasks get done on FPGA versus the high-level stuff in a NXP. We refocus on data center. Data center has been growing very fast for us. The server market for us, been growing 85% year-on-year.

Demand is strong for the foreseeable future, well into second half 2027 and up into the right. That's a quick summary. Great.

If you look at these, we, it's a multiplication of various factors, right? 5 factors, if you wish. Number 1, we grow along with obviously, we grow along with CapEx, and CapEx, you could think of CapEx as a number of servers. We grow along with number of server, and that's been the CPU, and the CPU as recently has been growing faster because of agentic. That's number 1. Number 2 factor that's multiplicative is AI as a % of the total server, because we do have higher content on AI server than a traditional server. Number 1, number of server. Number 2, AI content. Number 3 is attach rate. Attach rate, we've got a number of applications that are continuing to grow.

When I joined Lattice, we had tens of FPGAs per rack. Today, we have hundreds of FPGA per rack. The number of application we're finding and quite a few we can talk about are growing. Number four, the needs continue to grow. Security has been, for example, a big application for us. Over time, the security needs have been growing higher and higher, driving a bigger FPGA per board, and hence a higher Aspeed. Finally, number five recently was agentic. It's not only CPU, but also storage has been growing. That's number five. The second part of number five is the architecture have been changing.

If you look at the disaggregated architecture have taken over, disaggregated drives more FPGA because like for example, right now, you go from 1 board being the main processor board to 2 boards, HPM, where you've got the processor and where we have I/O expansion, and the second board, SCM, which is a satellite board where we do security with root of trust. Also, the unit of compute has migrated to where before it was 1 rack with everything in it to now 4 racks, a compute rack, a communication rack, a power rack, a cooling rack. With that, you could see we end up having a variety more application, variety more needs for FPGA. You really take maybe it's really 6 factors together, and you could see that's why we're growing faster than CapEx.

The latest numbers that we've seen for CapEx for just the four hyperscaler for next year in 2027 is gonna be over $1 trillion. Over $1 trillion. This number continues to grow, and this is just the hyperscalers. This doesn't include the Neocloud, does not include the sovereign, and doesn't include the enterprise. This number continue to grow is very fast, and we grow faster than the CapEx.