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LSI Corp. to acquire SandForce for $370 million

The SandForce team will be fully integrated to LSI's new Flash Component Division by early 2012

The California-based electronics company LSI Corporation is about to buy out another California-based semiconductor company in an unexpected move.

The acquisition of SandForce, says WSJ, will cost LSI around $322 million with an additional $48 million in unvested stock options. The buyout is expected to complete around early 2012.

Adding SandForce’s technology to LSI’s brand storage portfolio is consistent with our mission to accelerate storage and networking,” said Chief Executive Abhi Talwalkar to WSJ. With SandForce’s SSD technology until their belt, LSI will have a larger presence in PCs and ultrathin notebooks in particular where SSDs are more common. Previously, LSI were limited to more peripheral hardware, such as PCI and RAID adapters.

The news came simultaneously with the company’s impressive Q3 2011 financial results. LSI reported net gains of $29.3 million for the latest quarter, up from $23.4 million a year earlier. Revenue was also up by similar percentages.

At least one analyst sees the buyout as a smart step forward. “If hard drives are going [to be] replaced with solid state drive4s and you’re not a player there, then you’re going to be in trouble,” said Merriman Capital analyst Kaushik Roy to Reuters.

SandForce is present in many SSD solutions as proprietary controllers. Recent SSD releases, such as the Kingston HyperX, Patriot Pyro and OWC Mercury Aura Express include SandForce SF-2281 controllers for SATA III compatibility and speeds.


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Allen Ngo, 2011-10-27 (Update: 2012-05-26)