Estimates of future revenue are inherently uncertain due to, among other things, the high percentage of quarterly “turns” business. In addition, revenue is affected by such factors as global economic conditions, which may affect customer demand, pricing pressures, competitive actions, the demand for our Mature, Mainstream and New products, and in particular our iCE40™, MachXO™ and LatticeECP3™ devices, the ability to supply products to customers in a timely manner, changes in our distribution relationships, or the volatility of our consumer business. Actual gross margin percentage and operating expenses could vary from the estimates on the basis of, among other things, changes in revenue levels, changes in product pricing and mix, changes in wafer, assembly, test and other costs, including commodity costs, variations in manufacturing yields, the failure to sustain operational improvements, the actual amount of compensation charges due to stock price changes. Any unanticipated declines in revenue or gross margin, any unanticipated increases in our operating expenses or unanticipated charges could adversely affect our profitability.

In addition to the foregoing, other factors that may cause actual results to differ materially from the forward-looking statements in this press release include global economic uncertainty, overall semiconductor market conditions, market acceptance and demand for our new products, the Company's dependencies on its silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks, and the other risks that are described in this press release and that are otherwise described from time to time in our filings with the Securities and Exchange Commission. The Company does not intend to update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Lattice Semiconductor:

Lattice Semiconductor (NASDAQ: LSCC) is the world's leading provider of low-power programmable IC solutions for makers of smartphones, mobile handheld devices, small-cell networking equipment, industrial control, automotive infotainment, and much more. With more than 1 billion units sold over the past 10 years, Lattice ships more FPGAs, CPLDs and Power Management solutions than any other programmable solutions vendor. For more information, visit www.latticesemi.com. You can also follow Lattice via Twitter, Facebook, or RSS.

Lattice Semiconductor Corporation, Lattice (& design), L (& design), iCE40 Ultra, iCE40, MachXO and LatticeECP3 and specific product designations are either registered trademarks or trademarks of Lattice Semiconductor Corporation or its subsidiaries in the United States and/or other countries.

GENERAL NOTICE: Other product names used in this publication are for identification purposes only and may be trademarks of their respective holders.

Lattice Semiconductor Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
		Three Months Ended												Six Months Ended
		June 28, 2014				March 29, 2014				June 29, 2013				June 28, 2014				June 29, 2013
Revenue		$	99,320			$	96,637			$	84,694			$	195,957			$	155,852
Costs and expenses:
Cost of products sold		44,345				42,499				39,584				86,844				72,587
Research and development		22,302				21,239				20,267				43,541				38,381
Selling, general and administrative		18,832				18,749				17,072				37,581				33,570
Acquisition related charges		737				737				737				1,474				1,486
Restructuring		3				11				19				14				172
		86,219				83,235				77,679				169,454				146,196
Income from operations		13,101				13,402				7,015				26,503				9,656
Other income (loss), net		906				309				(54		)		1,215				(106		)
Income before provision for income taxes		14,007				13,711				6,961				27,718				9,550
Provision for income taxes		2,236				1,727				1,921				3,963				2,620
Net income		$	11,771			$	11,984			$	5,040			$	23,755			$	6,930
Net income per share:
Basic		$	0.10			$	0.10			$	0.04			$	0.20			$	0.06
Diluted		$	0.10			$	0.10			$	0.04			$	0.20			$	0.06
Shares used in per share calculations:
Basic		117,904				116,436				115,733				117,170				115,562
Diluted		120,944				118,917				117,109				120,041				116,935

Lattice Semiconductor Corporation
Consolidated Balance Sheets
(in thousands)
(unaudited)
		June 28, 2014				December 28, 2013
Assets
Current assets:
Cash, cash equivalents and short-term marketable securities		$	247,037			$	215,815
Accounts receivable, net		66,289				50,085
Inventories		59,270				46,222
Other current assets		13,857				13,679
Total current assets		386,453				325,801
Property and equipment, net		41,132				41,719
Long-term marketable securities		—				5,241
Other long-term assets		8,921				6,120
Intangible assets, net of amortization		11,011				12,484
Goodwill		44,808				44,808
Deferred income taxes		9,325				11,703
		$	501,650			$	447,876
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued liabilities		$	48,274			$	51,113
Deferred income and allowances on sales to sell-through distributors		23,631				7,495
Total current liabilities		71,905				58,608
Other long-term liabilities		7,195				3,588
Total liabilities		79,100				62,196
Stockholders' equity		422,550				385,680
		$	501,650			$	447,876

Lattice Semiconductor Corporation - Supplemental Historical Financial Information -
		Three Months Ended									Six Months Ended
		6/28/2014			3/29/2014			6/29/2013			6/28/2014			6/29/2013
Operations Information
Percent of Revenue
Gross Margin		55.4	%		56.0	%		53.3	%		55.7	%		53.4	%
R&D Expense		22.5	%		22.0	%		23.9	%		22.2	%		24.6	%
SG&A Expense		19.0	%		19.4	%		20.2	%		19.2	%		21.5	%
Depreciation and amortization (in thousands)		5,773			5,860			4,894			11,633			9,962
Capital expenditures (in thousands)		2,480			2,395			3,783			4,875			6,837
Stock compensation expense (in thousands)		3,320			3,090			2,513			6,410			4,423
Restructuring and severance related charges (in thousands)		403			90			19			493			172
Taxes paid (cash, in thousands)		418			380			104			798			956
Balance Sheet Information
Current Ratio		5.4			5.2			5.4
A/R Days Revenue Outstanding		60			62			68
Inventory Months		4.0			4.1			3.8
Revenue% (by Product Family)
PLD		65	%		65	%		69	%		65	%		69	%
FPGA		35	%		35	%		31	%		35	%		31	%
Revenue% (by Product Classification) (1)
New		50	%		53	%		46	%		51	%		43	%
Mainstream		38	%		34	%		40	%		36	%		42	%
Mature		12	%		13	%		14	%		13	%		15	%
Revenue% (by Geography)
Asia		74	%		75	%		74	%		75	%		72	%
Europe (incl. Africa)		16	%		15	%		14	%		15	%		16	%
Americas		10	%		10	%		12	%		10	%		12	%
Revenue% (by End Market) (2)
Communications		44	%		41	%		38	%		43	%		38	%
Consumer		26	%		31	%		31	%		28	%		28	%
Industrial		30	%		28	%		31	%		29	%		34	%
Revenue% (by Channel)
Sell-through distribution		42	%		39	%		44	%		40	%		46	%
Direct		58	%		61	%		56	%		60	%		54	%

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