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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 Conference Call. Please be advised that today’s conference is being recorded.
And without further delay, I would like to hand it over to your speaker today, Mr. Rick Muscha, Director of Investor Relations.
Thank you, operator, and good afternoon, everyone. With me today are Jim Anderson, Lattice’s President and CEO; and Sherri Luther, Lattice’s CFO. We’ll provide a financial and business review of the third quarter of 2020 and the business outlook for the fourth quarter of 2020. If you have not obtained a copy of our earnings press release, it can be found at our company website in the Investor Relations section at latticesemi.com.
I would like to remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions based on information that is currently available and actual results may differ materially. We refer you to the documents that the company files with the SEC, including our 10-Ks, 10-Qs, and 8-Ks. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.
This call includes and constitutes the company’s official guidance for the fourth quarter of 2020. If at any time after this call, we communicate any material changes to this guidance, we intend that such updates will be done using a public forum, such as a press release or publicly announced conference call. Some financial information that we present during the call will be provided on both a GAAP and a non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to permit further analysis of the company’s performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operational goals. For historical periods, we provide reconciliations of these non-GAAP financial measures to GAAP financial measures that can be found on the Investor Relations section of our website at latticesemi.com.
Let me now turn the call over to Jim Anderson, our CEO.
Thank you, Rick, and thank you, everyone for joining us on our call today. To start off, I'd like to once again thank our customers and partners for their support and I'd especially like to thank the Lattice team for their continued dedication and in execution. While I'm pleased with our progress, I'm even more excited about the potential of the company moving forward.
Let me cover a few highlights from Q3 of 2020. We continue to see year-over-year revenue growth in our two main segments of communications and computing and industrial and automotive. We also expanded non-GAAP gross margin by 170 basis points year-over-year. Non-GAAP operating margin expanded to 26.5% and non-GAAP net income increased 16% year-over-year.
We launched our Sentry Solutions Stack, which is focused on providing platform security in applications such as data center servers. This solutions stack was a third installment in our expanding portfolio of application specific software solutions. Finally, we remain on track to launch the third product based on our Nexus platform later this year.
Let me now provide an overview of our business by end market. In the communications and computing market, revenue was down 4% sequentially, but up 6% on a year-over-year basis. After a strong Q2, we saw modest sequential decline in communications and computing due to a decline in unit ship or servers as well as a decline in communications.
Year-over-year growth of 6% was driven by growth in servers and client computing. We continue to see this segment as a long-term growth opportunity as we was driven by growth in servers and client computing. We continue to see this segment as a long term growth opportunity as we expand our business in computing as well as in 5G infrastructure deployments.
Turning now to the Industrial and Automotive market, revenue increased 8% sequentially in Q3 and it was up 14% on a year over year basis. Q3 growth in the industrial segment reflects an improvement in end market demand and increased use of our products used in a broad range of applications including industrial, automation, safety, robotics and embedded vision.
Turning now to the consumer market, revenue declined 8% sequentially in Q3 and 45% year over year. This segment has been impacted this year by lower end market demand due to COVID 19 as well as an expected mix shift in our business. We remain focused on securing design wins and consumer applications with multi-year revenue streams and higher margins and where our solutions are enabling customers to differentiate their products.
I'll now provide some highlights of our recent product roadmap execution. As we discussed at our Nexus platform launch last December, we're investing in a portfolio of higher level software that enables our customers to adapt our solutions quickly and go to market faster. The first installment in our software portfolio was our award winning sensAI software stack which is focused on low power inference processing at the Edge of the network.
Earlier this year we launched mVision, our software stack focused on embedded vision applications which was the second installment in our portfolio. We built on this strong foundation with the launch of our third installment in Q3 which is our security stack called Sentry. The Sentry stack provides customers a comprehensive software solution to implement platform firmware resiliency and applications such as servers, networking and client computing.
In parallel, with a Sentry launch, we introduced Lattice SupplyGuard service, SupplyGuard extends the system protection provided by Sentry throughout the supply chain. This is accomplished by delivering factory locked devices to enable dynamic trust for our customers and the end users of their products.
When we launched our Nexus FPGA platform last December we also launched our first product based on that platform called CrossLink-NX. At that time we committed to releasing two additional Nexus based products in 2020. In June we launch Certus-NX as promised and I'm pleased to report that we remain on track to launch our third Nexus based product in Q4. We continue to be pleased with the customer engagement on our Nexus platform where the power efficiency and faster performance are helping our customers differentiate their applications and systems.
In summary we're pleased with our strong results in Q3 and we remain focused on executing our strategy for sustained long term revenue growth and profitability.
I'll now turn the call over to our CFO, Sherri Luther.
Thank you, Jim. Third quarter revenue was $103 million up 2.4% sequentially from the second quarter and was roughly flat year-over-year. The sequential increase from Q2 was driven by the industrial and automotive segment and licensing while partially offset by a decline in consumer and communications and computing.
Gross margin on a GAAP basis was up 30 basis points to 60.5% in Q3 compared to the prior quarter and was up 110 basis points compared to the year ago quarter. Our non-GAAP gross margin increased 20 basis points to 61.5% in Q3 compared to the prior quarter and was up 170 basis points compared to the year ago quarter. We continue to make steady progress on gross margin expansion as we benefit from our ongoing pricing optimization strategy product cost reduction and some mix.
Q3 GAAP operating expenses were $49.5 million compared to $48.1 million in the prior quarter and $44.8 million in the year ago quarter. On a non-GAAP basis, operating expenses were $36 million compared to $36.7 million in the prior quarter and $35.9 million in the year ago quarter. We continue to invest in our product roadmap while at the same time we remain committed to driving as SG&A spending closer to our target model.
Q3 GAAP earnings per basic and diluted share was $0.09 compared to $0.08 in the prior quarter and $0.10 in the year ago quarter. Q3 non-GAAP earnings per basic share was $0.20 and $0.19 per diluted share compared to $0.17 in the prior quarter and $0.17 in the year ago quarter. We continue to strengthen our balance sheet and remain focused on cash generation with our year-to-date cash from operations at approximately $69 million.
A key driver for the healthy cash generation in Q3 was an improvement of 14 days in DSO compared to the prior quarter. Our ending cash balance increased to approximately $182 million resulting in a positive net cash position.
Let me now review our outlook for the fourth quarter. Revenue for the fourth quarter of 2020 is expected to be between $99 million and $107 million. Gross margin is expected to be 61% plus or minus 1% on a non-GAAP basis. Total operating expenses for the fourth quarter are expected to be between $36.5 million and $37.5 on a non-GAAP basis. While COVID-19 continues to create some near-term uncertainty over the long term, we are focused on growth and profitability expansion driven by the strength and differentiation of our product roadmap.
Operator, you can now open the call for questions.
[Operator Instructions] Your first question comes from the line of Matt Ramsay from Cowen. Your line is now open.
Yes. Thank you very much. Good afternoon, everybody. I guess for both of you Jim and Sherri if you could talk a little bit about the breakdown by segment of revenues in the guidance and how it might relate to gross margin being down slightly sequentially?
And Jim as you guys talk about that I've had a few questions Intel guided their DCG business down I think 25% in the fourth quarter. And are you guys have pretty broad exposure to the server market through all vendors. But that was a pretty alarming number for some. So if you could address that as you talk about mix in the fourth quarter that would be really helpful? Thank you.
Yeah. Got it. Thanks Matt. So on the first part of your question on the Q4 segment outlook. So what we're expecting at this point is for our Communications and Computing segment to be sequentially up. We're expecting the IP revenue to be down to go back to sort of its more normal run rate usually ranges within $3 million to $5 million. So that's where we expect it to go down to in Q4.
And then for the other segments to remain roughly flat sequentially. So it's a little bit more color by segment. And then in terms of sequential gross margin guidance, yeah you will see that our sequential gross margin is down a little bit relative to Q3. And that really reflects the IP revenue being down sequentially from Q3 to Q4 which is clearly at a high gross margin.
And then on the last part of your question with respect to Intel and server what I would say is I could just speak for our business. We're you know we expect communications and computing overall to be up. We are seeing good strength in computing in Q4. So we expect that overall segment to be up for us. And maybe just as a reminder we're used in both Intel servers as well as AMD servers. So our products are used in both types of x86 platforms and so on. But back to the to your question yeah we expect communications and computing to go up sequentially.
Thanks, Jim. That's really helpful. Just as a follow-up you gave a number of milestones in the new product portfolio both on the hardware side and on the software side that you the company has hit some of those ahead of schedule. And then other ones that you intend to hit going forward. I'm just sort of stepping back Jim if you think about the design win traction that you're seeing for the new product portfolio.
If you could help sort of characterize that where it is versus where maybe you expected it to be 12 months ago and what that means for pace of revenue acceleration as those design wins come into revenue over the coming quarters? Thank you.
Yeah. Thanks, Matt. Yeah. And so on product milestones you know specifically with respect to our Nexus platform if you recall we launched the first Nexus product CrossLink-NX in December of last year. We launched the second and in June of this year called Certus-NX. And then we're on track to launch the third before the end of this year.
And so yeah execution remains on track design win traction and I would say general customer engagement on Nexus but I would say across our entire portfolio is quite healthy. We're very pleased with the design win progress that we're making this year. The sales team has been doing a really good job on that.
I think the last part of your question was more towards revenue and revenue growth. I think maybe a couple two or three key milestones to point out on some of those new products. As if you recall last year when we launched CrossLink-NX we also said that we would expect to see initial revenue from CrossLink-NX our first Nexus based product before the end of the year.
We still expect to see that it'll be a small amount of revenue this quarter but we expect to see production revenue this quarter and then it would grow obviously next year. And then maybe a couple other products that we launched last year that are now in production that I'd point out is the CrossLink cross product which we launched in Q3 of last year.
We saw revenue growth in that. This year we expect to see revenue growth again next year from that product. And then also the MachXO3D product that we launched last year that's our FPGA with specific security technology that makes it able to provide platform root of trust and in lots of different types of systems such as servers. We saw first production revenue in Q3 of this year. So this most recent quarter the production revenue will grow in Q4 and we expect it again to grow next year. So that gives you a few proof points around some of the new products and how they're starting to get revenue and beginning to ramp.
I really appreciate all the color Jim. Congrats on the results and I'll get back in queue. Appreciate it.
Thanks, Matt.
Your next question is from Charlie Anderson from Colliers Securities. Your line is now open.
Yeah. Thanks for taking my questions, and congrats on being a net cash position for the first time in an awfully long time. So, just to kind of hit on your prior answer about the segments. I think if I keep consumer and industrial flat sequentially and punch in $4 million a year for licensing it implies something like 20% year-over-year growth for Coms and Computing.
So just want to make sure I'm getting that right. And if that's indeed the case just kind of elaborate on some of the growth drivers underlying that coming off of this sort of mid-single digit growth rate year-over-year for that segment in Q3?
Yeah. I can. I'll speak kind of sequentially so Coms and Computing relative to Q3. You know first of all one headwind that we have in that segment is Huawei. Obviously there were new US government restrictions put in place with respect to Huawei earlier in Q3. And so, we stopped shipment to Huawei per the new regulations ahead of that mid-September deadline that had been put in place by the government.
And so, in Q4, we're not -- we're assuming no contribution from Huawei in Q4. And so, that's a little bit of a headwind in our Communications and Computing segment in Q4. But we're seeing strength in other areas and in particular in our Computing segment. And so, we expect that to offset the headwind. And actually that segment overall we expect to grow sequentially. And then yeah you're right that would give us a very healthy year-over-year growth as well.
Okay. Great. And then Jim I don't know if you wanted to weigh in at all on the AMND transaction. I mean Xilinx very key competitor for you. You're very familiar with AMD, members your team familiar with Xilinx. So just kind of curious how that you know over the long-term how do you think that impacts strategic positioning of Over the long term I think that impacts the strategic positioning of their company and yours emergence [ph] to the market. Thanks.
Yeah. Thanks, Charlie. Yeah we don't see it changing the environment for the portion of the market that we're focused on. So just as a reminder of kind of where what is our strategy and where's our focus. So Lattice is focused on being the absolute industry leader in small power efficient FPGAs. And so these are programmable devices that are used in a wide range of applications across edge computing, IoT, industrial IoT, control and security and all sorts of different types of systems.
And look when we look at our product portfolio today we're very happy with the portfolio. Today we think it's very strong. We're very pleased with the Nexus platform and its adoption. And we're actually even more excited about the roadmap that we have in front of us. And when we look at the industry we see that we're really the only FPGA company that's focused on investing in this part of the market small power efficient FPGAs. And I don't see that changing with this announcement.
And so certainly our customers see our commitment to this space. The customer engagements are very strong as I mentioned earlier. And you know there they see the new products that we're launching the new roadmap that we have coming and they're pretty excited. And so we remain focused on our strategy and executing to our roadmap and continuing to deliver to our long term business goals.
Your next question is from Tristan Gerra of Baird. Your line is now open.
Hi. Good afternoon. Could you elaborate on your expectations for communication to be up sequentially in Q4? Is that 5G base station driven? And also how sustainable is that trend into the first half of next year and also is it mostly outside of China or any, any color you could provide would be helpful?
Yeah, Tristan, on my earlier comments were with respect to the overall segment of Communications and Computing. So we have that as a single segment. So I was saying that overall segment we expect to be sequentially up. And then you look 5G is a, we see as a long-term revenue growth driver for us. We're seeing good growth from 5G. This year we certainly have more -- significantly more 5G infrastructure revenue this year than we have last year.
We believe we're still early in the 5G global deployments. And if you might recall at our investor presentation back in May of 2019 we shared that in a 5G base station we have over 30% more content in a 5G base station relative to similar 4G base station. So we see it as a long-term growth vector for the entire industry but also specifically for Lattice as well as we expect it to contribute to growth next year as well.
Okay. And then as a follow-up you talked last quarter about a PC win that sounds like it's with one OEM. And you've mentioned the opportunity that over time this could serve best the TAM that you see for data center given the PC units. What labeless conviction you have that you're going to win additional PC OEMs? And secondly what problem solving does your FPGA provide in PC that's unique enough to get other PC OEMS to use your products?
Yeah. So, in client computing you know on our last earnings call we shared that we had a new program that started production that you know obviously that continued into Q3 you know it’ll continue into Q4 and into next year. We’re quite pleased with the progress on that program and the revenue that we're seeing from that program. And you know we're also engaged more broadly in the industry to continue to win more business in the client computing space. We do believe we can bring some pretty unique value propositions to the client computing space.
One of the areas is around artificial intelligence processing, inference processing in particular where we can do things like human presence, detection as one example, also video connectivity, video integration overall connectivity integration within the PC platform. So there's a number of different areas where we think we bring a pretty unique value proposition with our combination of great power efficiency, program ability, flexibility. Artificial intelligence algorithms as you know are constantly evolving.
And so having a solution like ours that is reprogrammable and can adapt to changes in AI algorithms over time is a big plus for our customers. And so, yeah, we see this as a good long-term growth area for us in the computing segment.
Your next question is from Mark Lipacis of Jefferies. Your line is now open.
Hi. Thanks for taking my question. Jim, you had mentioned -- you mentioned kind of the introduction of this software platform since AI envision in Sentry. Can you give us a sense of like where you think you are in the deployment of these or where your customer base is embracing these -- our products?
And to what extent from your standpoint are these kinds of software you know help you to grow the market versus to help you kind of lock you know lock customers in to you know more of a sticky longer term design wins because they get kind of get entrenched in the software?
Yeah, Mark maybe I'll start with just a reminder of kind of what's our overall strategy with respect to software. So beyond the typical FPGA development environment that that we provide what we've been investing in as a portfolio of higher level software solution stacks that are application specific. And what that does for our customers is that makes it very easy for our customers to design our products into their systems and then really speeds up the time to market for them to get those systems to market.
The first one that we introduced was sensAI and that was around inference processing. The second one that we introduced was earlier this year in February and that was our mVision stack around a better vision processing. And then we just recently brought out our third version which is Sentry which is specifically around security and platform level security. And as you've as you can imagine we have on our roadmap additional software stacks that we're planning to bring out for instance next year as well.
So we're going to continue to build out this platform or this portfolio of software solutions stacks. And the deployment what we're seeing is actually those being deployed across every market that we serve. So we're seeing now it's over time depending on the market but for instance sensAI we're seeing that software stack being used in computing applications. It can be used in industrial applications.
Obviously there is consumer applications as well. We're seeing interest in Century crossed certainly server applications but there's other computing applications and industrial applications where that has relevance and so it's pretty broad based deployment.
And you know in terms of you asked about, is it -- does it -- is it, does it grow our market? Yeah it does in the sense of that it makes it much easier for customers to adopt our products. And so what we're seeing is some examples of where customers may not have a history using FPGAs and may not have a lot of comfort with FPGAs by providing them a complete solution stack we're able to help those customers switch to our devices very easily.
So for instance switch from a microcontroller device over to our devices along with our software solution stack. So it helps new customers make that transition more easy and then also as you mentioned it does create much more sticky -- stickiness with our customers as they integrate that software into their system level software that makes our solutions very sticky over a multi-generational basis.
Great. That's really helpful thank you. And I had a question follow-up question on the gross margins if I may. As you kind of approach the you know the low 60s and I apologize I forgot it, is your target gross margin was 62% or 60% plus maybe if you could just remind us of that longer-term gross margin target is as you approach that is that, do you think about reevaluating that target.
Is there a hard limit in the low 60 range or is you know other like Xilinx I think is in the high 60s for another FPGA benchmark there, is that -- is there like physical limit to the gross margin here or is this kind of your initial target is that kind of like a milestone that you worked towards and then you reassess as you -- as you hit it? Thank you.
Thanks Mark. Yeah. It's more as you just summarized. I think that's an initial milestone. And we’ll reassess once we've achieved that milestone. Just to be clear and so was the target that we had put out was greater than 62%. So we had shared that at our Investor Day back in May of 2019. And you know clearly we've made significant progress since then.
Just this most recent quarter in Q3 gross margins went up. I think it was 170 basis points year-over-year. So we remain focused on continuing to expand gross margins. Obviously our first focus is to get to that greater than 62% target. And I think once we get there we'll reevaluate what the target should be.
But I don't see that as you would call it a hard limit that 62%, I think there is, there is room beyond that. But we'll share that once we get past the 62% milestone. And just as a reminder of the gross margin expansion kind of where that's coming from is part of it as our pricing optimization strategy. We built that strategy out in late 2018 and we started implementing that in 2019. That continues to yield benefit and we continue to drive that strategy moving forward.
And that strategy is really about making sure that our products are priced for the right value in the market. They bring significant amount of differentiation to our customers. We want to make sure those products are priced correctly in the marketplace. And then the other part to the gross margin expansion has been the roadmap or product cost improvements that we've had.
So we've had a multi-year roadmap of product cost improvements that we’ve had. So, we’ve had a multiyear roadmap of product cost improvement we've been executing to and that's the other portion or the other driver of the gross margin expansion. And then, there has been some mix change as well. But the two main drivers of that pricing optimization and product cost improvements.
Got you. Thank you very much.
Your next question is from Christopher Rolland of Susquehanna. Your line is now open.
Hey, guys. Thanks for the question. I guess first on the industrial auto would be, I was wondering if maybe we could isolate automotive more specifically here. How big is it? And then, perhaps if you could talk about the kind of sequential bounce back we had for automotive, more specifically here and what applications might be driving that? Thanks.
Yeah. Thanks Chris. So, in industrial auto so that segment for us is the vast majority of the revenue is industrial. Automotive is still a pretty small part of that segment, although we do see automotive as a long-term growth driver for us. We have a healthy design win funnel in automotive electronics. We're getting designed into a number of different new types of applications and automotive electronics. Of course, that part of the market ramps slowly. Those are long time to revenue design win cycles.
So it drives more long-term growth. But we do see it as a good long-term growth driver. But as for today that segment is mostly industrial. So that's sequential improvement that we saw from Q2 to Q3 of 8% up sequentially or 14% up year-over-year. That's almost all driven by industrial. And I would say a couple things going on there in terms of the sequential improvement If you recall back in Q2, we did see some softness in industrial related to COVID-19 and the market impact of COVID-19 we started to see that end market demand strengthened in Q3. So that was good to see industrial end market demand strengthened.
But on top of that there's Lattice growth in the industrial segment in applications like industrial automation, robotics industrial safety, embedded vision that's growing on top of that end market improvement. So we're quite pleased with overall progress that we've been making in industrial and automotive and I think our performance in this segment has been quite strong despite the COVID-19 backdrop this year.
Okay. And I guess one for Sherri too, for licensing that one was kind of unexpectedly strong. I'm assuming nothing's changed here with licensing if there has I'd love to know about any updates there. But you know I think it was 150 basis point benefit there to gross margin for the quarter. Sherri I don't know if you have any thoughts on that and how gross margins kind of flowed here if you X out that benefit maybe versus expectations?
Yeah. Thank you for the question. So in terms of the lower or higher other IP licensing revenue in Q3 versus what we had expected it did come in higher than we expected. This area can be difficult to forecast, when we look at Q4 we expect it to be more in the normal range of $3 million to $5 million versus the slightly higher amount that it was in Q3.
When you look at the product gross margin it was down about 60 basis points sequentially. So when you exclude the IP component that you mentioned it was down sequentially But if you remember in our Q2 earnings call we said that we anticipated that we would experience some gross margin headwinds within our market segments and that's ultimately what happened.
And so when you look at our product gross margin year-over-year we saw an increase of a 170 basis points. And that's really coming from our gross margin expansion strategy. As Jim mentioned with pricing optimization, product cost reductions and some mix. So as we continue to execute toward our long-term model of greater than 62% that we laid out in our Analyst Day next year that that's the way that you can kind of think about that.
Your next question is from Alessandra Vecchi of William Blair. Your line is now open.
Hey everyone congratulations on a great quarter. Sherri I have a question for you as well if you can. It looks like your DSO decreased nicely this quarter from last quarter. If I recall I believe last quarter you had some one-time thing but due to supply constraints and mix and back-end nature of the quarter. But can you maybe remind us and how we should be thinking about the DSO target going forward?
Yeah thank you for the question Alex. So we didn't see DSO improvements in Q3 we had the improvement of 14 days. We achieved a 65 DSO the end of the quarter. And that was really due to improved shipment linearity. As you referenced in Q2 we did experienced supplier constraints within the supply chain due to COVID-19 restrictions.
So our ops team work through those constraints last quarter and really enabling them to generate an improvement in shipment linearity in Q3 and that would generate the 14-day improvement during the quarter, so we’re going to continue to work on improving our DSO, but there can be fluctuations on a quarterly basis just to due to the timing of when our customers want, they want the product but we -- our goal is to generate further improvements there but again there could be some fluctuations on a quarterly basis.
And then similarly on the operating expense line Lattice has done a tremendous job sort of keeping those in check and coming in sort of at the lower end or better than expected. As we look forward to next year and the continued new product introductions tape outs, attempts at gaining traction and potentially new end markets and verticals, how should we think about OpEx growth relative to maybe revenue growth or some other metric?
Yes so the way I would at OpEx, so I'll comment on the short-term and then kind of direct you to our long-term model that we laid out at our Analyst Day last year. And so during the quarter OpEx spending down. We had some spending efficiencies as well as some benefits from lower payroll taxes. When we looked to our Q4 guide which is slightly higher at the midpoint and that's going to be due to primarily due to program costs.
So higher program costs as we roll out our Nexus product in Q4 that Jim mentioned. And then when you look into further out beyond the next quarter at our Analyst Day last year we talked about our goal for OpEx to be at 35%. So we're actually at 35% in Q3. But what we are going to continue working on is sort of dialing in on the mix between R&D and SG&A and so the goal that we laid out last year was a 15% target for SG&A and then for R&D to be around 20%. And so we've got a little ways to go on SG&A to get further down to the 15% goal but that’s how you can think about overall OpEx target of 35% and within that we are in the SG&A composition.
Your next question is from Hans Mosesmann of Rosenblatt. Your line is now open.
Yeah. Thanks. Congrats, guys. Good execution. Hey, Jim I don't know if you ever kind of split out on the computing side of your data center business specifically between you know your FPGAs that are aligned with the actual motherboard or server CPU and say acceleration A6 or GPUs or network interface card and storage. I'm not sure if you've done that but if you could provide us some flavor of your exposure and those other markets that seem to be growing quite nicely.
Yeah, Hans it's a yeah we haven't broken that out. I would say in most of the revenue though is associated with FPGA is on the main CPU board usually doing control or security type functionality on main CPU motherboard. Although we are used on other cards as well so are used on data cards accelerator cards and other type of sort of ancillary cards ancillary to the main motherboard. But I would say that most of the revenue is from that part of the market is driven from the mean CPU motherboard.
Okay. On Huawei can you give us a reference point since there's though part of Huawei included in your outlook for Q4. How much was it roughly in Q3 and also Q2 just as a reference point?
Yeah maybe I'll just give you the full year since we know what Huawei revenue is going to be at this point given that we haven't assumed any for Q4. Huawei revenue for this year would have been let's say low single digits this year kind of in the 2% and maybe 2% to 3% range low single digit.
Okay. That’s helpful. And then the last question I have on 5G, I don't know if I you’ve - I may have missed it. How is that particular end market doing for you guys, it’s an area of penetration or market share gains. So any updates there would be helpful? Thanks.
Yeah. So on 5G we were pleased again in Q3 5G grew from a year-over-year standpoint. We've seen really good growth in revenue for 5G through the first three quarters of this year relative to last year was a nice growth contributor this year and we expect it to grow again next year. We're still early in the 5G rollout cycle.
If you look at worldwide deployments we're still early in that cycle and again we've got 30% more content in a 5G base station than we did in a 4G. So we expect it to be a good long term growth driver good multi-year growth driver for us as deployments happen worldwide over the coming years.
Okay. Thanks a lot.
Your next question is from Richard Shannon of Craig Hallum. Your line is open.
Hi, Richard, if you're speaking, you might be on mute. We can’t hear you. So Richard, we can't hear you.
Richard Shannon your line is now open. You may ask your question.
[Operator Instructions]
Operator, do you want to go ahead and move to the next caller.
There are no further questions and I would like to turn it back to Mr. Jim Anderson, CEO for any further comments.
Okay. Thank you operator and thanks everybody for being on the call today with us. We're pleased with our continued progress but we have a lot more work to do as we unlock the full potential of Lattice. We're excited about the future of Lattice and we remain focused on consistent execution on both our business strategy and our product roadmaps. Thanks everybody for joining us today and operator that concludes today's call.
Ladies and gentlemen thank you for participating. You may now disconnect.