Lattice Semiconductor Corporation (NASDAQ:LSCC) Q4 2022 Earnings Call Transcript

And then lastly, I’d highlight from a product perspective, we have multiple new product cycles that we’re going through. If you look at Nexus platform, our most recent platform in production, we have launched five device families, four device families are in production and the fifth one goes into production in the first half of this year. We have two more that we’re going to launch this year. And then of course, Avant is still out in front of us, ahead of us. And we’re really excited about the customer momentum around Avant. So again, certainly not immune to the macroeconomic pressures across the industry, but definitely some lattice specific growth vectors that we’re pretty excited.

Alessandra Vecchi: Great. And then just as one follow-up. It seems like EMEA as a geography has really outpaced year-over-year growth. Is that a function in a period where obviously the continent has some things going on? Is that really a function of content gains and share gain within industrial? Does it spread beyond industrial? Can you help us think about the traction you’re getting in Europe specifically?

Jim Anderson: Yes, definitely. So, in Europe that marks is more weighted towards industrial and automotive. So as we’ve seen our industrial and automotive revenue grow sort of globally. We’ve certainly seen strong growth in Europe and because Europe is kind of over weighted towards industrial auto, that’s why we’ve seen particularly strong growth in that geography.

Alessandra Vecchi: With that, I’ll go back into queue. Thank you.

Jim Anderson: Thanks, Alex.

Operator: Our next question comes from the line of David Williams with Benchmark Company. Please proceed with your question.

David Williams: Hey, thanks and appreciate the time to ask question. Let me also add my congratulations on this very solid quarter and execution here. And I guess really my first question for you Sherri is just on the gross margin and I know we’ve talked about this in the past, but just kind of wondering if you can tell us about how durable you think the gross margins will be around this level? I know we’ve had discussion, but it seems like there’s a lot of tailwinds at the company level, but maybe some headwinds developing from a market perspective, just kind of given the macro. Can you help us maybe understand the durability there?

Sherri Luther: Yes. Thanks, David, and thanks for the question. So, we’re really pleased with our record gross margin in Q4 of 70%, 50 basis points improvement sequentially and 490 basis points year-over-year. As a reminder, we’ve been executing on our gross margin expansion strategy now since 2019. This would actually be our fourth complete year that we’ve executed on that strategy and the results that we’ve been able to drive with that strategy have been 1,330 basis points since the end of 2018 executing on that strategy. And the elements of that strategy really multiple factors that have been driving it, pricing optimization being one, of course, again, we’ve been executing on this for four full-years now, so that’s been a key part of our strategy to really get the value for our products.