Exhibit 10.54


Portions
of this Agreement marked “*” have been redacted pursuant to a request for
confidential treatment submitted to the Office of the Secretary of the
Securities and Exchange Commission (the “SEC”). An unredacted version of this
agreement has been filed separately with the SEC.


ADDENDUM #2 TO


ADVANCE PAYMENT AND PURCHASE AGREEMENT


THIS ADDENDUM #2 TO ADVANCE
PAYMENT AND PURCHASE AGREEMENT  (this “2nd Addendum”) is entered into with an
effective date of October 1, 2006,
by and between Lattice Semiconductor Corporation, having an office at 5555 NE
Moore Court, Hillsboro, OR 97124 (“Lattice”) and Fujitsu Limited, having an office at Akiruno Technology Center, 50 Fuchigami, Akiruno, Tokyo 197-0833,
Japan (“Fujitsu”) and Fujitsu
Microelectronics America, Inc., having an office at 1250 East Arques
Avenue, M/S333 Sunnyvale, CA 94088-3470, USA (“FMA”).


WHEREAS, Lattice and Fujitsu have entered into an
ADVANCE PAYMENT AND PURCHASE AGREEMENT dated September 10, 2004 (“APPA”) and
subsequently amended in an addendum dated March 22, 2006 (“1st Addendum”)
in which Lattice agreed to provide an advance payment of money to Fujitsu to be
used for the establishment of a new semiconductor wafer fabrication facility,
including but not limited to the construction of the facilities and
installation of fabrication equipments, and Fujitsu agreed to provide to
Lattice 300mm Wafers using certain proprietary technologies;


WHEREAS, Lattice, Fujitsu and FMA have entered into or
will enter into product supply agreements pursuant to which Lattice will buy
from Fujitsu through FMA, and Fujitsu through FMA will supply to Lattice, the
300mm Wafers and 200mm Wafers (as defined in Section 1 below) fabricated by
Fujitsu; and


WHEREAS, Lattice, Fujitsu and FMA wish to modify the
APPA to extend by one year the earliest date on which Lattice may request
repayment of advances under the APPA that have not at such time been applied
toward wafer purchases, and also to make sales and purchases of 200mm Wafers
(as defined in Section 1 below) subject to the APPA.


NOW, THEREFORE, in consideration
of the mutual promises herein, Lattice Fujitsu
and FMA hereby agree as follows:



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1.                                       Addition to Definitions.  The following terms are inserted as Sections
1.23 through 1.27 of the APPA:


“1.23       “200mm Wafers” will mean
Akiruno 200mm Wafers and Mie 200mm Wafers.


1.24         “Akiruno 200mm Wafers”
will mean the 200mm semiconductor wafers fabricated by Fujitsu at Akiruno
Facility for delivery and sale to Lattice under this Agreement and the 200mm
Product Supply Agreements.


1.25         “Mie 200mm Wafers” will mean the 200mm
semiconductor wafers fabricated by Fujitsu at the Fujitsu 200mm semiconductor
wafer fabrication facility located in Mie, Japan for delivery and sale to
Lattice under this Agreement and the 200mm Product Supply Agreements.


1.26         “200mm Price” will mean the price at
which Fujitsu will sell and Lattice will purchase the 200mm Wafers and reticles
therefor, pursuant to a 200mm Product Supply Agreement.


1.27         “200mm Product Supply Agreement(s)”
will mean the agreement(s) by and among Lattice, Fujitsu and FMA pursuant to
which Fujitsu agrees to sell and Lattice agrees to purchase, all through FMA,
the 200mm Wafers for Lattice’s products.”


2.                                       Change
to Repayment Date.  Section 8 of the APPA
is deleted and replaced in its entirety with the following new section 8:


“If,
for any reason, there remains a portion of the Credited Amount that has not
been used to purchase 200mm Wafers or 300mm Wafers by December 31, 2008 (or
such later date as may be mutually agreed), then Lattice will have the
option, in its sole discretion and subject
to the dispute resolution process provided in Section 13.2, to elect to
receive repayment in cash of all or part of such then remaining outstanding
portion of the Credited Amount. Fujitsu will repay any such amount within ninety (90) days of Lattice’s written request
therefor, together with simple interest at the rate of one and
seventy-five one hundredths percent (1.75%) per annum from the date of such
written request.”



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3.                                       Change
to Term.


3.1                                 Section 12.1 of the
APPA is deleted and replaced in its entirety with the following new section
12.1:


“The term of this Agreement will extend from the date
first written above until all of the Credited Amount has been credited against
200mm Wafers and/or 300mm Wafers purchased hereunder or
repaid to Lattice, unless terminated earlier pursuant to Section 12.2 or
12.3. After the expiration of this Agreement, any Product Supply Agreement in
effect between the parties at such time will govern the relationship between
the parties with respect to the manufacture, shipment, sale, and purchase of the 300mm Wafers provided under this Agreement,
and any 200mm Product Supply Agreement in effect between the parties at such
time will govern the relationship between the parties with respect to the manufacture,
shipment, sale, and purchase of the 200mm
Wafers provided under this Agreement.”


3.2                                 Section 12.4.4 of the APPA is deleted and replaced
in its entirety with the following new section 12.4.4:


“If
Fujitsu terminates this Agreement pursuant to Section 12.2 or 12.3.1, the
parties will complete the purchase and sale of 300mm Wafers ordered in
accordance with the applicable Product Supply Agreement and 200mm Wafers
ordered in accordance with the applicable 200mm Product Supply Agreement, and
offset the relevant Credited Amount. 
Fujitsu will repay the then remaining Credited Amount with no interest
by the later of (i) December 31, 2008, or (ii) six (6) months from such
termination.”


4.                                      Credit
of Advance Payment.  Section 5.2 of the APPA is deleted and replaced in
its entirety with the following new Section 5.2:


“The One Hundred
Twenty-Five Million U.S. Dollars (U.S.$125,000,000) Advance Payment (once paid,
referred to as the “Credited Amount”) will be repaid by an offsetting adjustment
in the amount of one hundred percent (100%) of the Price, as described in Section 7, for 300mm
Wafers purchased under a Product Supply
Agreement and one hundred percent (100%) of the 200mm Price for 200mm Wafers purchased under a 200mm Product Supply Agreement.
The then current 300mm Price and/or
200mm Price, as applicable, for all purchases by Lattice of 300mm Wafers and 200mm Wafers will be offset cumulatively
against the Credited Amount until the aggregate dollar value of the 300mm Price
for all 300mm Wafers



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purchased by
Lattice, plus the aggregate dollar value of the 200mm Price for all 200mm
Wafers purchased by Lattice, equals the amount of the Credited Amount.”


5.                                      Free
200mm Wafers. Section 5.3 of the
APPA shall be renumbered as 5.3.1 and the
following shall be inserted as Section 5.3.2:


“As a
consideration for Lattice’s payment of the Advance Payment, Fujitsu will
provide Lattice with * free Akiruno 200mm Wafers and/or Mie 200mm Wafers,
respectively, whenever the respective aggregated amount of the Akiruno 200mm
Wafers or Mie 200mm Wafers shipped by Fujitsu reaches every * wafers while the
Credited Amount exists, provided that, all the 200mm Wafers for which free
200mm Wafers will be provided are paid for by offsetting the 200mm Price thereof
against the Credited Amount. The Credited Amount will not be reduced by the
200mm Price of such free Akiruno 200mm Wafers or Mie 200mm Wafers. Lattice will
not receive free Akiruno 200mm Wafers or Mie 200mm Wafers with respect to any
200mm Wafers purchased by Lattice other than through reduction of the Credited
Amount.”


6.                                      The provisions of Sections 5.4, 5.5, and 7.3 of the APPA and
Section 2 of the 1st Addendum will be applicable not only to
300mm Wafers, but also to 200mm Wafers delivered to and accepted by Lattice
under the applicable 200mm Product Supply Agreement and paid for by means of an
offset against the remaining balance of the Credited Amount.


IN WITNESS WHEREOF, the parties have signed this 2nd Addendum as of the date first
above written.


	
  LATTICE SEMICONDUCTOR

  CORPORATION

  	
   

  	
  FUJITSU LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Tom Kingzett

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Tatsuya Yamazaki

  	
   

  
	
  Name:

  	
   

  	
  Tom Kingzett

  	
   

  	
   

  	
  Name:

  	
   

  	
  Tatsuya Yamazaki

  	
   

  
	
  Title:

  	
   

  	
  Corp. VP, Foundry Relations

  	
   

  	
   

  	
  Title:

  	
   

  	
  General Manager, Foundry and

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ASIC Marketing Division

  	
   

  
	
  Date:

  	
   

  	
  28 September 2006

  	
   

  	
   

  	
  Date:

  	
   

  	
  22 September 2006

  	
   

  



 



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FUJITSU MICROELECTRONICS AMERICA, INC.


	
  By:

  	
   

  	
  /s/ Keith Horn

  	
   

  
	
  Name:

  	
   

  	
  Keith Horn

  	
   

  
	
  Title:

  	
   

  	
  COO

  	
   

  
	
  Date:

  	
   

  	
  27 September 2006

  	
   

  







* denotes
redaction pursuant to a request for confidential treatment.


 



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