Within the last year, there have been several major acquisitions in the storage industry. Western Digital acquired STEC, Virident, and Velobit; SanDisk acquired SMART; and now Toshiba is taking over OCZ's assets. With two weeks of 2013 left, there's still time for one more: Avago, a company which supplies a variety of semiconductors, is acquiring LSI for $6.6 billion in cash. 

Avago may not be a familiar name to most of you but there is a good chance that you own a device with an Avago chip in it. The iPhone 5 along with multiple other Apple devices uses an LTE duplexer module and power amplifier from Avago but these are chips that don't usually get much attention. In terms of the storage industry, Avago's focus is on the enterprise side and they make Fibre Channel transceivers and Fiber Optics for instance.

For Avago, the motive behind the acquisition is LSI's IP and know-how. With LSI's product portfolio Avago will be able to expand their offerings in the storage industry and move to a more vertically integrated business model. As for LSI, I've heard that part of the motivation was shareholders' dissatisfaction with the company and especially its growth opportunities. Avago opens plenty of doors since they have expertise in multiple fields of semiconductors, which may be useful in the future as the storage industry becomes more and more complex.

I'll be speaking with LSI tomorrow to find out more about the deal but I'm guessing LSI will, at least in the near future, continue to operate normally.

Source: LSI Press Release

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  • klmccaughey - Monday, December 16, 2013 - link

    Wowzers - that's a big gobble! Reply
  • dgingeri - Monday, December 16, 2013 - link

    Really, really big fish chomps down on a really big fish. I hope this doesn't hurt the industry. There are few enough hardware RAID controller makers in the world. We don't need one fewer. Reply
  • toyotabedzrock - Monday, December 16, 2013 - link

    Didn't LSI buy sandforce, or was that another company? Reply
  • DanNeely - Monday, December 16, 2013 - link

    They did in 2011. Reply
  • MichalSuchyn - Monday, December 16, 2013 - link

    Love my job, since I've been bringing in $5600… I sit at home, music playing while I work in front of my new iMac that I got now that I'm making it online(Click on menu Home)
    http://goo.gl/AbkROp
    Reply
  • Cainethanatos - Tuesday, December 17, 2013 - link

    You're a well paid web designer ? Reply
  • surt - Wednesday, December 18, 2013 - link

    No, the well paid web designers make about 3 times that. Reply
  • Kyrra1234 - Monday, December 16, 2013 - link

    I wonder if this deal is at all tied in with Dell? Silver Lake Partners is helping finance the purchase of LSI, the same company that helped Dell go private. Dell gets a lot of chips from LSI (MegaRAID ships as Dell's PERC, plus all the SAS stuff that LSI makes that goes into Dell servers).

    It's more likely that Silver Lake Partners just deals in with these types of companies, so they just happen to show up on both. LSI hasn't really been that strong of a company, probably good for them to join up with another large ASIC company.
    Reply
  • SodaAnt - Monday, December 16, 2013 - link

    Silver Lake was already a part owner of Avago from way back until 2005, so probably unrelated to the Dell deal. Reply
  • lecaf - Tuesday, December 17, 2013 - link

    ASIC? I wonder if there is a BitCoin angle to this acquisition. Avango is in Singapore and lots of Chinese there... Reply

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