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LSI to buy flash controller maker SandForce

It plans to pay $370M in cash, stock deal

Fabless semi-conductor maker LSI Corp. today announced it will acquire SandForce, the leading maker of flash memory controllers for enterprise-class and consumer flash cards and SSDs. The buyout catapults LSI into the leadership position in SATA SSD controllers.

The acquisition, LSI said, will boost its competitive position in the fast-growing server and storage PCIe flash adapter market, where LSI's WarpDrive family of products already use SandForce flash storage processors.

SandForce's processors are used to control NAND flash-based storage devices. The company sells controllers for both consumer-type SSDs and flash devices for storage arrays and servers in corporate data centers.

The controllers provide tools on SSDs and PCIe-cards such as data encryption and data wear-leveling, which extends the life of a drive by more evenly distributing data so as to not wear out any one portion of the flash chips. SandForce is used by leading SSD vendors such as Intel and OCZ.

Market research firm Objective Analysis does not anticipate any significant change to SandForce's support of SSD makers and the company's reach should be expanded through LSI's larger sales force.

LSI sells integrated circuits and application specific ICs (ASICs) that it calls system-on-a-chip (SoC) devices, which combine a microprocessor, memory and logic. Besides its more recently released PCIe-based flash cards, the company has traditionally sold RAID cards and host bus adapters for the storage market. It also sells into the networking and wireless communications markets.

Some of LSI's biggest customers include IBM, Seagate, and Hewlett-Packard.

LSI's WarpDrive card is one of a growing number of such products that have recently come to market. Others include Texas Memory Systems' RamSan products , OCZ's RevoDrive, Marvell's DragonFly and Fusion-io's IODrive . EMC also announced earlier this year that it plans to sell its own brand of PCIe-based flash cards into the application server market.

LSI's WarpDrive card can deliver up to 240,000 I/Os per second , or up to 1.5Gbps throughput.

According to Objective Analysis, LSI holds a leading position in storage controllers (RAID controllers) and has a deep understanding of the technology stemming in part from its participation in the storage systems market. LSI sold off its external storage array products division , Engenio, in March to NetApp for $480 million.

LSI has experienced "impressive growth with its WarpDrive PCIe SSDs," according to Objective Analysis, but the company has not had much participation in the market for other SSDs, particularly in the SATA market where unit volumes are highest.

"With this acquisition, LSI assumes a leadership position in SATA SSD controllers, positioning itself as a leader in storage control, HDD and SSD controllers, becoming a one-stop controller shop for all things storage. SandForce has sold SSD controllers to market leading companies including LSI's partner Seagate," said Objective Analysis analyst Jim Handy.

The buyout will also give SandForce greater financial and engineering resources, along with a better understanding of the challenges facing the system-level designer, Handy said.

Most NAND flash makers continue to use proprietary controllers. "With the exception of Intel, a company that devoted a significant number of platform architects to the design of its SSD, these controllers have not proven to be any better than their competition," Handy said. "Objective Analysis anticipates that many SSD makers will convert from proprietary controllers to third-party controllers, and most NAND flash makers fall into this category."

"Flash-based solutions are critical for accelerating application performance in servers, storage and client devices," Abhi Talwalkar, LSI's CEO said in a statement. "Adding SandForce's technology to LSI's broad storage portfolio is consistent with our mission to accelerate storage and networking. The acquisition represents a significant, rapidly growing market opportunity for LSI over the next several years."

The transaction is expected to close early in the first quarter of 2012 subject to customary closing conditions and regulatory approvals. Upon closing, the SandForce team will become part of LSI's newly-formed Flash Components Division, with SandForce CEO Michael Raam as general manager.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed . His e-mail address is [email protected] .

Read more about storage in Computerworld's Storage Topic Center.


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