Broadcom Struts Storage Stuff

ORLANDO, Fla. -- Now that it has integrated technology from storage companies acquired over the past 20 months, Broadcom Corp. (Nasdaq: BRCM) intends to use the Storage Networking World tradeshow here this week to declare itself a significant storage chip player.

This is going to be our big coming-out party,” Broadcom storage marketing director Shriraj Gaglani says. “We’ve been in development, acquired some companies -- now we’re ready to turn some heads.”

Analysts at IDC have projected storage semiconductors to be a $1 billion-plus market next year, and Broadcom is chasing its fair share of that market. The Irvine, Calif.-based company bought the assets of bankrupt switch maker Gadzoox for $5.8 million in February 2003, then picked up controller startup RaidCore for $16.5 million last February (see Broadcom Gulps Gadzoox and Broadcom Switches on FC).

Broadcom has dribbled out products from those acquisitions, bringing out a 4-Gbit/s switch controller from Gadzoox technology in May, and an HBA from RaidCore in July (see Broadcom Barrels Into 4-Gig and Broadcom RAIDs SMB Storage Market). Today at SNW it announced a SATA Raid-on-a Chip (ROC) device and a single-chip I/O controller for HyperTransport devices based on RaidCore technology (see HyperTransport Announces 2.0 Devices).

Broadcom will also demonstrate other storage products this week that it has previously announced. For instance, the vendor will show off iSCSI HBA functionality, including remote boot capabilities in its NetXtreme II converged network interface controller (C-NIC) chip announced in May (see Broadcom Broadens Storage Play). The chip is sampling to OEMs, and Broadcom hopes it will drive revenue soon.“One of the premises of iSCSI has merely been a PowerPoint presentation so far -- the ability to remote boot over iSCSI,” Gaglani says.

That premise might remain a PowerPoint presentation for awhile. It’s probably too much of a high-end feature for current IP SANs, which are primarily used as low-end storage now.

Sean Lavey, IDC program manager for semiconductor research, says Broadcom’s real opportunity lies with the serial technology it gained from RaidCore. He sees the migration to SAS and SATA giving storage chip newcomers Broadcom, Applied Micro Circuits Corp. (AMCC), (Nasdaq: AMCC), Marvell Technology Group Ltd. (Nasdaq: MRVL), and Vitesse Semiconductor Corp. (Nasdaq: VTSS) an opening to challenge traditional parallel chip makers like LSI Logic Corp. (NYSE: LSI) and Adaptec Inc. (Nasdaq: ADPT).

“Serial devices really open up the door for Broadcom,” Lavey says. “SATA and SAS are starting to ramp up, and as serial becomes a checklist item on the motherboard, you’ll see them as a player.”

Broadcom could use some positive action. It is looking to make up revenue its ServerWorks server chipset business has been steadily losing because of competition from Intel Corp. (Nasdaq: INTC). ServerWorks’ income declined $10 million last quarter, and Broadcom CEO Lanny Ross forecasts it will be down $40 million this quarter year-over-year (see Broadcom to Acquire ServerWorks).But Ross isn’t counting on storage delivering too much revenue over the short run. “At this point, it’s somewhat embryonic,” Ross told analysts on the company’s earnings call last week when asked about storage revenue. “We’re certainly not talking about millions of dollars in the short term. It’s more like tens of millions.”

— Dave Raffo, Senior Editor, Byte and Switch