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Seagate to acquire LSI/Sandforce from Avago

by on30 May 2014

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Surprise move in the SSD industry

Seagate has announced that it will be acquiring LSI's Accelerated Solution Division and Flash Components Division from Avago, which comes as an rather intriguing turn of events considering that Avago has just recently closed the acquisition deal with LSI. Seagate will pay Avago US $450 million in cash and the acquisition is expected to be finalized in Q3 2014.

Definitely a good deal for Seagate

Back in 2011, LSI paid US $322 million in cash and US $48 million in stock in order to get Sandforce and now Seagate managed to get both the Sandforce and LSI for a mere US $80 million more, which definitely sounds like a good deal. On the other hand, all is not well in the LSI/Sandforce world as there have been some rumours regarding the delay of the new SF3700 controller which is now scheduled to arrive in the second half of this year. In case you missed it, Avago bought LSI about six months ago for US $6.6 billion.

In addition to Sandforce lineup, Seagate will now hold the entire line of LSI's Nytro-branded PCIe SSDs, mostly aimed at datacenters.

“Seagate is committed to providing our customers with a complete range of storage solutions, and this acquisition will significantly enhance our flash storage offerings to supplement our existing portfolio,” said Steve Luczo, Seagate chairman and CEO. “LSI’s ASD business has the broadest PCIe flash product offering and intellectual property in the market today and the FCD business has best-in-class SSD controllers with proven support for a wide range of applications. This acquisition immediately boosts Seagate’s range and depth of flash storage capabilities today, and these teams bring to Seagate the expertise to accelerate our roadmap in this important and growing market.”

Big things happening in the SSD world

There have been some rather big developments in the SSD world recently. Toshiba acquired OCZ and its SSD business, while WD has been making quite a push by acquiring some interesting names like the STEC, Virident and VeloBit, and now Seagate got LSI/Sandforce. Seagate has been pushing for SSD market for quite some time and LSI/Sandforce certainly sounds like a very good starting point.

Unfortunately, Seagate's announcement was not clear regarding the future of LSI/Sandforce and its licensing model, which allowed many OEMs, including Intel, Kingston and many more to use SF2000 series controllers, has been definitely pushing the SSD industry in a good direction. We honestly doubt that Seagate will cut that deal now that the next-gen SF3700 is incoming as, according to the press release, Seagate expects a revenue of at least US $150 million from the combination of its enterprise SSD product line and the newly acquired LSI/Sandforce assets.

In any case we will surely keep an eye out on Seagate and the results of this newest acquisition in the SSD market.

Last modified on 30 May 2014
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