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LSI Backs Chelsio

LSI Logic is making a strategic investment in Chelsio Communications, leading a $12 million funding round the startup hopes will help it stake an early claim in the 10-Gbit/s Ethernet iSCSI chip market.

CEO Kianoosh Naghshineh refers to the funding as the "first close" of the round, hinting that Chelsio might extend the round. The $12 million brings Chelsio's total funding to $67 million.

Although Naghshineh was reluctant to name his new investor last week when contacted by Byte and Switch, Chelsio today confirmed that LSI Logic will lead the round. Previous investors, Invesco Private Capital and New Enterprise Associates, are also involved with the D round. The investors kicked in hoping the market for iSCSI TCP/IP offload engine (TOE) cards picks up with the help of 10-Gbit/s Ethernet.

"Now's the time when people start placing their bets," Naghshineh says. "It looks from the trenches like something's starting."

LSI is one of those placing bets. Although LSI and its storage systems group Engenio have not been iSCSI players, LSI CEO Ahbi Talwalkar said in recent investor conferences that his firm is considering getting involved in iSCSI if 10-Gbit/s Ethernet drives enough market demand.

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