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LSI Forces Out Adaptec

Beats rival to win $250M contract with Dell, and more OEM deals are on the way, it says

Storage chip manufacturer LSI Logic Corp. (NYSE: LSI) has beaten archrival Adaptec Inc. (Nasdaq: ADPT) to a $250 million, three-year deal with Dell Computer Corp. (Nasdaq: DELL). And company officials say three more contracts are in staging.

The Dell OEM deal boosted LSI Logic shares $0.34 (1.84%) to $18.79 by late afternoon Monday.

Dell currently uses Adaptec SCSI host bus adaptors (HBAs) but has switched to LSI because that vendor was first to market with Ultra320 SCSI technology -- the newest SCSI interface, which doubles the throughput of current HBAs to 320 megabytes per second. (For more on the seventh generation of the SCSI standard see: SCSI Trade Association.)

Adaptec is not expected to ship Ultra320 SCSI products until the first quarter 2002.

LSI says it's got three more deals in the works with "top tier" server providers, but nothing's been finalized yet.

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