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Azioni lattice semiconductor12/27/2023 Historically, the FPGA market was more diverse with more players, as seen in the chart below of the FPGA market share in 2013. We expect its Communications and Computing segment, which is its largest segment, to stand to benefit from the deployment of 5G infrastructure and forecasted its segment growth with an average growth rate of 15.6% through 2025. We believe that the company's advantage of providing low-cost FPGA makes it advantageous for the company when competing against Xilinx, Intel, and Microchip. Thus, we projected its Communications and Computing segment to grow at its 3-year average growth rate of 15.9% in 2022, tapering down by 1% per year through 2025.Ĭommunications and Computing Forecast ($'000s) Lattice Semiconductor iCE40 UltraPlus FPGA (ICE40UP3K-UWG30ITR50) CT Compared to its competitors, the company’s FPGA product is priced significantly lower than competitors, and 98% lower than Xilinx’s products. We compared its FPGA products with key competitors in the FPGA market including Intel, Xilinx and Microchip ( MCHP) in terms of product prices on Digikey in USD. We focus on the small size and power efficient - Jim Anderson, CEO Those two competitors that you mentioned, which are traditional competitors, they really focus on the very large, very high power, complex FPGAs. The company’s CEO highlighted its focus on the small size and power-efficient FPGA as a difference to its competitors in the FPGA market such as Xilinx and Intel ( INTC). In its Investor Day 2021 presentation, it claims that its products provide up to 4x lower power consumption than competitors. The 5G equipment market is forecasted to grow 22.6% in 2022 while Gartner ( IT) estimates a 60% 5G network share by 2024. The company’s FPGA products in this segment are targeted for applications that include 5G infrastructure. According to the company’s annual report, it supplies flexible, low-power, small form factor FPGAs. In contrast to Xilinx, Lattice's largest segment is the Communications and Computing segment which accounts for 43% its revenues in 2020 and had a 5-year average revenue growth of 5%. Xilinx's ( XLNX) largest segment is Aerospace and Defense, followed by its Communications segment accounting for 30% of revenues. Based on a DCF, we obtained an upside of -9.3% with an industry average EV/EBITDA of 24.15x. Lastly, we remain cautious on the outlook of its consumer segment which saw its revenues decline by -10.6% on a 5-year average despite the company's management highlighting its focus on multi-year and higher margin products. However, we expect greater competition against the company with Renesas announcing its entry into the low-power FPGA market. In this analysis of Lattice Semiconductor Corp ( NASDAQ: LSCC), we analyzed the company’s focus on low-power and low-cost FPGA products provided through each of its segments. Sundry Photography/iStock Editorial via Getty Images
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