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Component Makers Plan Storage Growth

Component suppliers are increasing their focus on storage in an effort to tap growing demand and reduce reliance on telecom gear.

Last week, for instance, component maker LSI sold its mobility business to Infineon for $450 million in cash in a deal that continues LSI CEO Abhi Talwalkar's long-term plan to narrow the company's focus onto storage and networking technologies.

LSI's been building up to this for awhile. Following the $4 billion acquisition of Agere Systems earlier this year, the firm sold its consumer products division to Magnum Semiconductor. (See LSI to Buy Agere for $4B and LSI Completes Sale.) Earlier in 2007, the vendor bought semiconductor startup SiliconStor in an attempt to link Serial Attached SCSI (SAS) and Serial ATA (SATA). (See LSI Lassos SiliconStor and LSI Pays $55M for SiliconStor.)

It's all part of a strategy that's aimed at bulking up storage and networking solutions while getting away from straight telecom and consumer electronics wares. LSI will jettison solutions for cellphone handsets and satellite digital radio when it completes the Infineon deal in the fourth quarter.

LSI wants to synergize its networking and storage expertise. "We're working very closely with the storage OEMs and the network OEMs on some innovative multiprotocol solutions," said Jeff Richardson, executive vice president of LSI's networking and storage products group at the company's analyst event in July.

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