Lattice Semiconductor Reports Third Quarter Results

HILLSBORO, Ore. - October 20, 2003 - - Lattice Semiconductor Corporation (NASDAQ: LSCC) today announced financial results for the third quarter of 2003.

Revenue for the quarter was $51.0 million, down 12 percent from the $58.2 million reported last quarter and a decrease of nine percent from the $56.1 million reported in the same quarter a year ago.

Quarterly revenue from FPGA products was $9.2 million, an increase of three percent from last quarter while quarterly revenue from high density CPLD products was $34.8 million, down 14 percent from last quarter.

New product revenue grew 41 percent sequentially and now accounts for 12 percent of total quarterly revenue. Mainstream product revenue declined four percent sequentially and now accounts for 44 percent of quarterly revenue, while Mature product revenue declined 27 percent sequentially and now accounts for 44 percent of quarterly revenue.

On a GAAP basis, net loss for the quarter was $21.9 million ($0.20 per share). This loss includes an $18.7 million charge for amortization of intangible assets.

Non-GAAP loss for the quarter was $3.2 million ($0.03 per share). This loss includes a $5.7 million non-recurring charge associated with the early call of our previously outstanding 4 ý percent convertible notes. Non-GAAP earnings exclude non-cash acquisition related amortization expenses and more closely approximates our cash earnings performance. A reconciliation of non-GAAP to GAAP earnings accompanies the financial tables in this earnings release.

"While disappointed with our overall revenue performance last quarter, we remain encouraged about the acceptance of our new products", stated Cyrus Y. Tsui, chairman and chief executive officer. "Our recently introduced products once again generated a record level of design activity during the last quarter and continue to be well received by our worldwide customer base. These new products now account for over 50 percent of our new design-ins. Unfortunately the sequential revenue growth of our new products and our FPGA business was more than offset by the sequential revenue decline of our mature product families."

Business Outlook - December 2003 Quarter

• Revenue is expected to be approximately flat.
• Gross margins are expected to be approximately flat as a percentage of revenue.
• Total operating expenses are expected to be approximately flat.
• Other Income is expected to be approximately $400 thousand.
• We do not anticipate reporting a tax provision.

On October 21, 2003, Lattice will hold a telephone conference call at 5:30 am (Pacific Time) with financial analysts. Investors may listen to our conference call via the web at www.ccbn.com. Both the conference call and our business outlook statement will be available on our website, www.lscc.com. On December 11, 2003, we plan to publish a "Business Update Statement" on our website. Our financial guidance will be limited to the comments on our public quarterly earnings call and these public business outlook statements. Additionally, during the December 2003 quarter, Lattice plans to participate in investor conferences sponsored by the American Electronics Association, JP Morgan and Morgan Stanley. Specific presentation dates and times are posted on our website atwww.lscc.com.

• Consolidated Financial Statements
• Supplemental Historical Financial Information

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal Securities laws including statements about future quarterly financial results, revenues, customers, product offerings and our ability to compete. Investors are cautioned that actual events and results could differ materially from these statements as a result of a number of factors, including overall semiconductor market conditions, market acceptance and demand for our new products, risks related to our recent acquisitions and their integration with Lattice, our dependencies on our silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks.

Oregon-based Lattice Semiconductor Corporation designs, develops and markets the broadest range of Field Programmable Gate Arrays (FPGAs) and Field Programmable System Chips (FPSCs) and high-performance ISP^TMprogrammable logic devices (PLDs).

Lattice offers total solutions for today's system designs by delivering the most innovative programmable silicon products that embody leading-edge system expertise. Lattice products are sold worldwide through an extensive network of independent sales representatives and distributors, primarily to OEM customers in the communication, computing, industrial and military end markets. Company headquarters are located at 5555 N.E. Moore Court, Hillsboro, Oregon 97124 USA. For more information access our web site at www.latticesemi.com.

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Lattice Semiconductor Corporation, L (& design), Lattice (& design), in-system programmable, ISP 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.

For more information contact:

Roddy Sloss
Vice President, Finance
Lattice Semiconductor Corporation
(503) 268-8000