Artisan Mid Cap Fund on Lattice Semiconductor Corporation
Thesis
Lattice specializes in low-power field-programmable gate arrays for data centers, communications and industrial systems. FPGA revenue increased 62% year over year, reflecting broad strength in these end markets. Its acquisition of AMI adds platform firmware and data center management software to its hardware, positioning Lattice as a fuller AI infrastructure management-and-control supplier. The manager expects an accelerated profit cycle and added shares following a market rotation out of data center hardware.
“We expect the acquisition to accelerate Lattice’s profit cycle”
Key risks
- Investor rotation away from data center hardware enablers has already hurt the shares.
- Integration of AMI and delivery of an expanded management platform may fall short of expectations.
- The exceptionally strong recent FPGA growth rate may not persist across end markets.