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AMCC Buys More Storage

Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) deepened its commitment to storage today to the tune of more than $150 million by purchasing Serial ATA controller startup 3ware Inc.

The boards of directors for both companies approved the acquisition for $150 million in cash plus stock options based on an exchange ratio to be determined at closing. AMCC executives say they expect the deal to close April 1 (see AMCC Acquires 3Ware).

Like other telecom-chip makers, including PMC-Sierra Inc. (Nasdaq: PMCS),
Vitesse Semiconductor Corp. (Nasdaq: VTSS), and Broadcom Corp. (Nasdaq: BRCM), AMCC entered the storage sector looking to make up for sagging telecom revenues (see PMC Still Likes Storage, Chip Trio Faces Post-Bubble Blues, and Broadcom Raids SATA Startup).

San Diego-based AMCC took its first plunge last October, purchasing Fibre Channel host bus adapter (HBA) startup JNI for $213.7 million (see AMCC Looks to Buy JNI). Now that AMCC has HBAs, SATA controllers, and storage chips, can a full-blown SAN system be far behind?

Since we acquired JNI, we have been very vocal about our desire to expand our storage business into complementary areas,” AMCC CEO Dave Rickey said on a conference call to announce the 3ware deal.

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