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Lattice Semiconductor Corp. Reports Operating Results (10-K)

March 11, 2011 | About:
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Lattice Semiconductor Corp. (LSCC) filed Annual Report for the period ended 2011-01-01.

Lattice Semiconductor Corp. has a market cap of $715.2 million; its shares were traded at around $6.07 with a P/E ratio of 12.9 and P/S ratio of 2.4.

Highlight of Business Operations:

In 2002, we entered the FPGA market as a result of our acquisition of the FPGA business of Agere Systems, Inc. During fiscal 2010, 33% of our revenue was derived from FPGA products, compared to 33% in 2009 and 26% in 2008. In the future, we plan to introduce new FPGA families in high-growth market niches where we believe that we have sustainable and differentiated positions.

During fiscal 2010, 67% of our revenue was derived from PLD products, compared to 67% in fiscal 2009 and 74% in fiscal 2008. We currently offer the industry's broadest line of PLDs based on our numerous families of ispLSI®, ispMACH,® GAL® and MachXO products.

Export sales as a percentage of our total revenue were 88%, 85% and 83% in fiscal 2010, 2009 and 2008, respectively. Export sales to China accounted for 42%, 43% and 28% of revenue in fiscal 2010, 2009 and 2008, respectively, to Europe accounted for 18%, 17% and 21% of revenue in fiscal 2010, 2009 and 2008, respectively, to Japan accounted for 13%, 10% and 14% of revenue in fiscal 2010, 2009 and 2008, respectively, and to Taiwan accounted for 3%, 3% and 9% of revenue in fiscal 2010, 2009 and 2008, respectively. Both export and domestic sales are denominated in U.S. dollars, with the exception of sales to Japan, where sales to certain customers are denominated in yen.

Our largest customers are distributors and have historically made up a significant portion of our total revenue. Revenue attributable to resales of products by Arrow Electronics, Inc., including its wholly-owned subsidiary Nu Horizons Electronics Corp. accounted for approximately 18%, 12% and 14% of revenue in fiscal years 2010, 2009 and 2008, respectively. Revenue attributable to resales of products by Avnet, Inc. accounted for approximately 17%, 13% and 14% of revenue in fiscal years 2010, 2009 and 2008, respectively. Revenue attributable to resales of products by the Weikeng Group (Weikeng Industrial Co. Ltd. (Taiwan) and Weikeng International Co. Ltd. (Hong Kong)) accounted for approximately 14%, 9% and 0% of revenue in fiscal years 2010, 2009 and 2008, respectively. Sales of products to Promaster Technology Corporation accounted for approximately 0%, 1% and 10% of revenue in fiscal years 2010, 2009 and 2008, respectively. Sales of products to ASTI Holdings Ltd. accounted for approximately 0%, 16% and 7% of revenue in fiscal years 2010, 2009 and 2008, respectively. No other individual customer accounted for more than 10% of total revenue in any of the fiscal years 2010, 2009 and 2008.

During fiscal 2009, the Company embarked on a program to restructure its distribution channels, primarily in the Asia Pacific region, from a sell-in to a sell-through distribution model. As a result the majority of our revenue in fiscal 2010 was from resale of our products by sell-through distributors. In connection with this program, Lattice terminated our distribution agreement between Lattice and Promaster Technology Corporation on July 2, 2009, between Lattice and Dragon Technology Distribution and FE Global Electronics effective for various territories on February 1 and February 6, 2010, respectively, and between Lattice and other distributors effective on various dates. Dragon Technology Distribution and FE Global Electronics are wholly-owned subsidiaries of ASTI Holdings Ltd. Resale of product by sell-through distributors as a percentage of our total revenue was 56%, 38% and 33% in fiscal years 2010, 2009 and 2008, respectively.

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