The Six Five team discusses the latest earnings report from Lattice Semiconductor.
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Transcript:
Daniel Newman: Let’s talk about Lattice Semiconductor, I’ve got a few opinions, but I’m going to let you go first here.
Patrick Moorhead: So first off, if you may not be familiar with Lattice, CEO ex-AMD’er Jim Anderson who made AMD famous with Xen, is CEO and he’s just been crushing it over there. They had a tremendous quarter. Lattice does the lowest power FPGA’s out there. They can replace controllers, they can replace ASIC, you can do an FPG design a year to a year and a half faster than you can do an ASIC, and it’s programmable, which is pretty cool. They’ve been crushing it, they’ve been moving up the food chain, whether it’s in 5G base stations, whether it’s in cars. Pretty much every Intel and AMD server, in a hyper-scaled data center has a Lattice semi security chip. Remember a couple of years ago the spy chip gate that Bloomberg brought out that freaked everybody out? Well essentially the first chip now that powers on on these hyper scale servers is a Lattice semi-chip. Financially Jim Anderson has gotten the company in a great spot here. Cleaned up a bunch, wasn’t tremendous amount of growth, but what he did was he kept growth, but he completely turned the offerings upside down, increased the rate of products by I don’t know, 5X, if I compare it to the prior administration.
Let’s talk about earnings now. Revenue up 19%, gross margin was up, Op Inc was up 2X, net income was up 2X as well. A ton of new products for the quarter, and I think gave a real top of the hat, a metric is they joined the S & P Mid-Cap 400. Which I think is a nice testament to they’re getting bigger, and they’re getting badder. I think Lattice’s big challenge now is, challenge for a company that grew 19%, is to grow even more. They really cleaned up everything, got profitable, got the machine working really well, increasing amount of products. I’m expecting ’21 and ’22 to be growth mode for the company when their new designs, the clutch goes in and they start to see the fruits of their labor.
Daniel Newman: Yeah, next week the company hosts an investor day, I’ll be tuning in among a few other events. What a busy week, we got IBM Think, we got more, we got some events to talk to everybody about in the near future. With commentary, I’ll put some links in the show note. I did a research note on Futurum about Lattice’s result, I also published a piece on MarketWatch today highlighting some underappreciated semiconductor companies where I specifically pointed to Lattice. Which by the way generated over $115 Million in revenue. It’s as Pat has suggested, inside of servers, automobiles, IoT in automation industrial applications, in 5G. Their chips are kind of everywhere, their FPGA’s. The programmability is really a differentiator. They’ve found their niche, they’ve found an identity. The company is leaning into that differentiation and really becoming the best at what it does. If you’re looking at a company and you’re trying to understand an opportunity and a market, sometimes you want the most diversified and the most general purpose. But sometimes you want a company that just says, “We are going to be the best in what we do.” That’s really when I look at Lattice, it’s very steadfast in staying the course, and it’s been able to carve out some real growth. You’re talking in the 20 percentage plus rate in that market.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
