Lattice Semiconductor (LSCC) investor relations material

Data center and AI growth dynamics

• Server market estimates increased from 15M to 20M units this year, with a rising AI server mix and strong demand for both AI and general-purpose servers.

• Attach rates for FPGAs in servers have grown from 1.x to above 3.x, driven by expanding applications and higher ASPs.

• AI-related business now represents a high-20% share of overall revenue, with design wins in both data path and server domains.

• Growth is fueled by higher attach rates, increased server complexity, and a multiplier effect from both AI and standard server deployments.

• New applications like leak detection and advanced management are expanding the addressable market for FPGAs.

Attach rate drivers and AMI integration

• Attach rate growth has shifted from I/O expansion to security, manageability, and power/cooling applications.

• The AMI acquisition enables integrated solutions, combining firmware and hardware for enhanced manageability and security.

• Integrated solutions with AMI are considered greenfield opportunities, offering higher value than standalone products.

• Customers, especially hyperscalers, are focused on uptime, security, power optimization, and heterogeneous infrastructure management.

• AMI's manageability layer is key for supporting mixed infrastructure and rapid system deployment.

Sustainability and future growth outlook

• FPGA content in data center racks is seen as sustainable due to rapid design cycles, need for flexibility, and low power consumption.

• Integration with AMI further insulates from ASIC replacement by enabling programmable, upgradable solutions.

• Unit volume growth is expected to be the primary driver for FPGAs, while AMI's value expansion and integrated solutions will drive higher revenue per unit.

• Physical AI and robotics represent emerging growth areas, with meaningful revenue expected to start by end of next year.

• Industrial business is recovering, showing 20% year-on-year growth, with continued expansion anticipated.