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LSI Forces Out Adaptec: Page 2 of 3

LSI engineers say they had to overcome several technology hurdles to create the Ultra320 SCSI product. Among these hurdles was finding a way to perform packetized data transfers. These kinds of transfers were theoretically possible in the previous generation of SCSI, but no one had worked out an implementation. LSI also developed a way to allocate the HBA more time to transfer data rather than process it.

LSI officials said the company's acquisition of Symbios Inc., a business unit of Hyundai Electronics America, for $760 million in 1998 and its September 2001 acquisition of a unit from American Megatrends for RAID technology, helped LSI to create the Ultra320 SCSI technology.

Storage components represented 32 percent of LSI's $2.74 billion in sales in 2000. CEO Wilfred Corrigan says he expects to see modest sales growth of 1 percent to 5 percent from the third quarter to the fourth quarter 2001.

And he thinks demand is on the rise, despite the recent economic slump. The most severe downturn has been in communications. Storage was much less affected,” he says.

A potential stumbling block down the road for LSI might be its indifference toward iSCSI -- a method that wraps SCSI in IP instead of Fibre Channel before sending it over a network. Despite the market buzz surrounding this area, LSI says it has no activity to support it. "Our focus is on SCSI and FC. We are focused on storage as opposed to network storage," a company spokesperson says. LSI appears to be unaware of the momentous convergence going on between the two sectors.