Lattice Semiconductor Sees AI Server Demand Fueling FPGA Growth

AI server demand is driving Lattice’s FPGA growth, with higher server shipments, increasing FPGA attach rates, greater server complexity and rising average selling prices.

AI-related products now represent the high-20% range of the company’s overall business.

The AMI acquisition expands Lattice into server-management solutions covering uptime, security, power and cooling, leak detection and heterogeneous infrastructure.

The company expects integrated hardware-and-firmware offerings to create new data-center opportunities.

Lattice reported recovering industrial demand and improving visibility, with bookings extending through the fourth quarter of next year.

Supply constraints remain concentrated in assembly, testing and packaging, while the company expands capacity to support continued growth.

Lattice Semiconductor NASDAQ: LSCC CFO Lorenzo Flores said the company is seeing rising demand from both AI-focused and general-purpose server deployments, supported by increasing FPGA content per server and higher average selling prices.

Speaking at a KeyBanc Capital Markets event, Flores said industry estimates for total server shipments have increased during the year, from roughly 15 million units with an approximately 20% AI mix at the start of the year to a recent estimate of about 20 million units with a higher AI mix.

He said both AI servers and the conventional CPU-based infrastructure supporting broader agentic workloads are contributing to demand.

“We saw a really strong unit volume growth in our products going to servers,” Flores said. He attributed that growth to rising attach rates, growing server complexity and expanding average selling prices for Lattice devices.

Flores said Lattice’s historical server footprint was centered on bridging and I/O expansion, with security capabilities including root of trust subsequently added. The company is now seeing opportunities in manageability functions, including power and cooling management.

He said Lattice’s attach rate in server applications has risen from roughly 1.x several years ago to 2.x and then 3.x, and is now higher still.

The company has also moved toward supplying higher-value FPGA products, including devices from its MachXO and Nexus families.

AI-related exposure, including products used on the data path and in the server domain, has grown to the high-20% range of Lattice’s overall business, according to Flores.

He said the company does not have significant direct exposure to AI compute itself and does not always have complete visibility into how customers deploy every device after shipment.

For the FPGA business, Flores said unit-volume growth should remain the primary driver over the next several years, with continued increases in attach points providing additional upside.

He cited leak detection as an example of a data-center application that has become increasingly important.

He also expects ASPs to continue progressing.

Flores said Lattice’s acquisition of AMI is intended to expand the company’s capabilities in server management and create opportunities for integrated hardware and firmware solutions.

He described the combined offering as a “greenfield” opportunity that could deliver more value than an FPGA or management firmware product on a standalone basis.

According to Flores, customer discussions around the combined Lattice-AMI offering have focused on several key...