We examined below the factors for its outperformance for these segments.
Moreover, management attributed the growth over the past year to a broadening product portfolio. This was mainly driven by the outstanding performance of its two largest segments, Communications & Computing and Industrial & Automotive. In conclusion, Lattice outperformed our previous forecasts of 14.1% growth in 2022 with a full-year actual growth rate of 28.1% as the company's growth rate accelerated to the highest in the past 5 years.
LATTICE SEMICONDUCTOR PORTLAND OR DRIVERS
Additionally, Lattice's CEO Jim Anderson highlighted that the company is "in the midst of… the largest product portfolio expansion the company has ever done in its history" when answering a question about the growth drivers behind the company's strong total revenue YoY growth of 22% in Q1 2023 as well as the over 20% growth for the past two years. Moreover, in its Q1 2023 earnings briefing, management highlighted its strong growth in Industrial & Automotive by 55% YoY in Q1 2023 which "reflects strong customer adoption of Lattice solutions in new design wins across a broad range of applications". Growth in Automotive was driven by the adoption of new designs in ADAS and infotainment applications - Lattice Semiconductor Corporation 2022 Annual Report … strong customer adoption in a broad range of applications, including industrial automation and robotics. According to management, the segment growth can be attributed to… The end markets of the segment are Security and Surveillance, Machine Vision, Industrial Automation, Robotics, Automotive and Drones. According to management in its annual report, the segment growth can be attributed to "content expansion in datacenter servers, new greenfield client computing opportunities, 5G infrastructure, and datacenter networking".īesides that, Industrial & Automotive grew by 41.2%, much higher compared to its 5-year average of 25.5% and more than double our previous forecast of 17.4%. Based on its annual report, the end market applications of the segment are Wireless, Wireline, Data Backhaul, Server Computing, Client Computing and Data Storage. This growth was fueled by massive outperformance by the two largest segments which are Communications & Computing (41.6% of 2022 revenue) and Industrial & Automotive (48.4% of revenue).Ĭommunications & Computing grew by 26.1%, above the 5-year average of 19.7% and our previous forecast of 15.9%. Source: Company Data, Khaveen Investmentsīased on the table above, the company's 2022 actual revenue grew by double (28.1%) compared to our previous forecasted growth rate (14.1%). By analyzing the market share changes, we identify the key drivers of growth, assessing their respective contributions to both market expansion and company-specific advancements. To understand the factors behind this outstanding performance, we delved into the segments that contributed to the growth and assessed how Lattice's FPGA market share evolved from 2021 to 2022, thereby determining whether the company's outperformance stemmed from market expansion or its competitive advantage. Additionally, in Q1 2023, the company continued to exhibit robust revenue growth, with a YoY increase of 22.5%. With this in mind, we conducted a fresh analysis of the company, placing significant emphasis on its exceptional revenue growth performance in FY2022, surpassing our earlier forecast of 14.1% by doubling to 28.1% - the highest in the past five years. However, from that point until June 2023, the stock price witnessed a remarkable surge of approximately 63%.
Since our previous coverage, Lattice Semiconductor's stock price has maintained a relatively stable trajectory, experiencing a modest 4% increase until October 2023.
Consequently, we rated the company as a Hold, projecting a downside risk of 9.3%, and setting a target price of $53.43. Additionally, despite management's emphasis on generating multi-year revenues, Lattice struggled to capitalize on the demand for FPGAs in the consumer segment, as evidenced by consistent revenue declines. Furthermore, we noted the intensifying competition within the FPGA market, attributed to the entry of industry giants like AMD (Xilinx) ( AMD ) and Intel ( INTC ) with new product releases, as well as Renesas ( OTCPK:RNECF ) venturing into the low-power FPGA segment. In our previous analysis of Lattice Semiconductor Corporation ( NASDAQ: LSCC), we identified the company's distinct focus on low-power and cost-effective FPGAs, setting it apart from competitors who prioritize larger, high-power, and complex FPGAs.
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