3333 33 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 3, 2009 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 000-18032 LATTICE SEMICONDUCTOR CORPORATION (Exact name of registrant as specified in its charter) Delaware 93-0835214 (State of Incorporation) (I.R.S. Employer Identification Number) 5555 NE Moore Court Hillsboro, Oregon 97124-6421 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (503) 268-8000 Securities registered pursuant to Section 12(b) of the Act: (Title of Class) (Name of each exchange on which registered) Common Stock, $.01 par value NASDAQ Global Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No Aggregate market value of voting stock held by non-affiliates of the registrant as of June 28, 2008................................................................................................................. $209,572,214 Number of shares of common stock outstanding as of March 11, 2009 115,510,688 DOCUMENTS INCORPORATED BY REFERENCE The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement relating to the 2009 Annual Meeting of Stockholders, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. 2 LATTICE SEMICONDUCTOR CORPORATION FORM 10-K ANNUAL REPORT TABLE OF CONTENTS ITEM OF FORM 10-K Page PART I Item 1. - Business ........................................................................................................................ 4 Item 1A. - Risk Factors................................................................................................................... 11 Item 1B. - Unresolved Staff Comments ......................................................................................... 20 Item 2. - Properties....................................................................................................................... 20 Item 3. - Legal Proceedings ......................................................................................................... 20 Item 4. - Submission of Matters to a Vote of Security Holders ................................................... 21 PART II Item 5. - Market for the Registrant’s Common Stock, Related Stockholder Matters, and Issuer Purchases of Equity Securities. ..................................................................................... 22 Item 6. - Selected Financial Data................................................................................................. 24 Item 7. - Management’s Discussion and Analysis of Financial Condition and Results of Operations ..................................................................................................................... 25 Item 7A. - Quantitative and Qualitative Disclosures About Market Risk....................................... 34 Item 8. - Financial Statements and Supplementary Data ............................................................. 36 Item 9. - Changes in and Disagreements with Accountants On Accounting and Financial Disclosure...................................................................................................................... 67 Item 9A. - Controls and Procedures................................................................................................ 67 Item 9B. - Other Information.......................................................................................................... 67 PART III Item 10. - Directors, Executive Officers and Corporate Governance ............................................ 68 Item 11. - Executive Compensation............................................................................................... 68 Item 12. - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...................................................................................................... 68 Item 13. - Certain Relationships and Related Transactions, and Director Independence .............. 69 Item 14. - Principal Accountant Fees and Services........................................................................ 69 PART IV Item 15. - Exhibits and Financial Statement Schedules ................................................................ 70 Signatures ........................................................................................................................................................ 73 Schedule II—Valuation and Qualifying Accounts .......................................................................................... S-1 Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. We use words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “continue,” “ongoing,” “future,” “potential” and similar words or phrases to identify forward-looking statements. Forward-looking statements involve estimates, assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. The key factors that could cause our actual results to differ materially from the forward-looking statements include global economic conditions and uncertainty, the compromised liquidity of auction rate securities in our long-term marketable securities portfolio, market acceptance and demand for our new products, our reliance on export sales, the concentration of our sales in the communications equipment end market, the affect of global economic conditions on the repayment of certain of our receivables, the effect of the downturn in the economy on capital markets, technology and development risks, the transition to a new executive management team, our having clearly focused our business on identifying and pursuing programmable logic opportunities where we have sustainable and differentiated market positions, the impact of competitive products and pricing, and the other risks that are described herein and that are otherwise 3 described from time to time in our filings with the Securities and Exchange Commission (“SEC”), including but not limited to, the items discussed in “Risk Factors” in Item 1A of Part I of this report. You should not unduly rely on forward-looking statements because our actual results could materially differ from those expressed in any forward- looking statements made by us. Further, any forward-looking statement applies only as of the date on which it is made. We are not required to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events. Item 1. Business. Lattice Semiconductor Corporation (“Lattice” or the “Company”) designs, develops and markets high performance programmable logic products and related software. Programmable logic products are widely used semiconductor components that can be configured by end customers as specific logic circuits, enabling shorter design cycle times and reduced development costs. Our end customers are primarily original equipment manufacturers (“OEMs”) in the communications, computing, consumer, industrial, automotive, medical and military end markets. Lattice was incorporated in Oregon in 1983 and reincorporated