Seagate Picks Up LSI Flash Business Months After Avago's LSI Acquisition

As the ever-transforming storage industry inches closer to retiring the spinning disk, Seagate announced an acquisition agreement with Avago Technologies under which Seagate will acquire assets of the LSI Accelerated Solutions Division (ASD) and Flash Components Division (FCD) from Avago for $450 million in cash. The news comes just six months after LSI was sold to Avago for $6.6 billion and less than one month after that acquisition was completed.

As a part of Seagate's portfolio, LSI solutions add established enterprise PCIe flash and SSD controller capabilities, such as the Nytro lineup and SSD-controller focused SandForce. LSI's enterprise-grade PCIe flash solution has been very successful and focuses on the cloud and hyperscale markets. The FCD business, led by its SandForce SF2000 and SF3700 controller products, is driving a multi-product roadmap to address volume markets. LSI acquired SandForce in 2011 for $370 million.

“Seagate is committed to providing our customers with a complete range of storage solutions, and this acquisition will significantly enhance our flash storage offerings to supplement our existing portfolio,” said Steve Luczo, Seagate chairman and CEO. “LSI’s ASD business has the broadest PCIe flash product offering and intellectual property in the market today and the FCD business has best-in-class SSD controllers with proven support for a wide range of applications. This acquisition immediately boosts Seagate’s range and depth of flash storage capabilities today, and these teams bring to Seagate the expertise to accelerate our roadmap in this important and growing market.”

LSI's SandForce licensing model is widely used in the industry, allowing OEMs without controllers or NAND technology to enter the market. Whether Seagate will continue this licensing model once the LSI divisions are integrated into the company remains an open question. LSI has also contributed two storage infrastructure reference designs to Facebook's Open Compute Project, an open source hardware and data center design effort.

As a Silicon Valley stalwart, LSI was started in 1981 and has been a large OEM provider that licensed its intellectual property for server, storage and networking industries. Perhaps Avago was interested in LSI for other reasons and had no interest in its flash business. With the addition of LSI products, Seagate quickly becomes a big player in the SSD market. Its competitor Western Digital acquired another hard drive maker with Hitachi HGST, but then also acquired enterprise flash storage company Virident.