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Storage Spending Season
5:45 PM -- The multi-billion dollar storage deal is becoming as much of a December fixture as endless reruns of It's a Wonderful Life.
LSI Logic's $4 billion pickup of chip rival Agere today marks the third straight year we've seen a blockbuster December acquisition. (See LSI to Buy Agere for $4B.) Last year, Seagate bought Maxtor for $1.9 billion, and Symantec plunked down $13 billion on Veritas in December of 2004. (See Seagate Munches Maxtor and Symantec & Veritas: It's a Deal.)
Like the Seagate-Maxtor acquisition, LSI's annexation of Agere is likely to have little effect on storage customers despite the hefty price tag. Agere's portfolio expands LSI's product line into wireless and broadband access but creates no new products, since Agere was already selling those chips to OEMs.
But LSI has designs on dominating the SAS market, and Agere's technology will come in handy there. (See LSI Delivers Second-Gen SAS, LSI Rolls SAS for DAS, and LSI, Seagate Team on SAS.) The SAS hard drive controller market is moving toward integrated storage on a chip (SOC) technology that puts the memory, hard drive controller, interface controller, and read channel on one chip.
Agere and Marvell have SOCs that hard drive vendors would have found enticing for next-generation SAS drives. LSI Logic didn't have a SOC, but for $4 billion, it does now.
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