Seagate has just announced that they will be acquiring LSI's Accelerated Solution Division and Flash Components Division from Avago, which translate to LSI's Nytro lineup along with the SSD controller focused SandForce. This announcement comes as a surprise because about six months ago, Avago announced that they will be acquiring LSI, so this sale comes only a few weeks after that acquisition was closed. Seagate will be paying Avago $450 million in cash and the transaction is expected to close in Q3'14.

For Seagate this deal is a steal. Back in 2011, LSI paid $370 million ($332m in cash and $48m in stock) for SandForce alone and now Seagate is getting LSI's flash accelerator business for only $80 million more. Since Seagate doesn't have any SSD controller technology, this acquisition is huge for them because so far they have been relying on third parties for controllers and NAND. Without controller IP, it's relatively hard to be competitive in the SSD market because you can't differentiate your product. With SandForce Seagate will be able to become a serious player in the SSD space and I'm sure one of the reasons why Seagate had to act quickly is WD's recent acquisitions in the SSD industry (STEC, Virident & VeloBit). 

It makes sense from Avago's angle too. I've been hearing that LSI/Avago hasn't been very happy about the SF3700 delays, so that might explain why the price seems a bit low. I'm also thinking that Avago was never interested in LSI's flash business in the first place and that's why Avago decided to liquidate it so quickly after the acquisition. 

At this point it's too early to say what this means to the SSD industry as a whole. SandForce's licensing model has been one of the corner stones for the industry as it has allowed OEMs with no controller or NAND technology to easily enter the market. The press release doesn't directly disclose whether Seagate will continue to license SandForce controllers to other OEMs but I'm fairly sure they will as Seagate expects the enterprise SSD and SSD controller lineup to generate at least $150 million in revenue next year. 

All in all, this is certainly very interesting news. I'm trying to get in touch with Seagate/LSI to get more details about this acquisition and it's details, so stay tuned for more news and analysis.

Source: Seagate PR

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  • althaz - Thursday, May 29, 2014 - link

    The only surprising part of this announcement is that Seagate didn't make this move when LSI did a few years ago.

    Hopefully Seagate and Sandforce can bring some good drives to the table. Lately, all I ever seem to buy are Samsungs.
  • Hrel - Thursday, May 29, 2014 - link

    "Lately, all I ever seem to buy are Samsungs."

    So pretty much anything is a step up for you. Congratulations, you're at rock bottom, a current Seagate or Mushkin would be better.
  • Guspaz - Thursday, May 29, 2014 - link

    Seagate's SSDs have amongst the lowest failure rates in the industry. How would Seagate or Mushkin SSDs be a step up?
  • takeshi7 - Thursday, May 29, 2014 - link

    Having the lowest failure rates in the industry is a good thing. Nobody likes it when their SSDs fail.
  • althaz - Friday, May 30, 2014 - link

    Samsung drives are amongst the best performing (in most categories holding outright leads) and are CLEARLY the most reliable in terms of consumer drives (I don't know too much about enterprise drives). If you're not buying Samsung right now, you're doing it wrong.
  • edzieba - Friday, May 30, 2014 - link

    "and are CLEARLY the most reliable in terms of consumer drives"

    No, that would be Intel's consumer offerings.
  • althaz - Monday, June 2, 2014 - link

    Intel's high-performance drives are slower, more expensive and less reliable than Samsung's drives - which is why I've stopped buying Intel and started buying Samsung. Intel's drives are the next best for reliability, which just goes to show you how good Samsung's drive are at the moment.
  • romrunning - Friday, May 30, 2014 - link

    If you think Samsung SSDs are "rock bottom", you really need to wake up, drink some coffee, and try looking at some benchmarks. Samsung may not *always* take the #1 spot, but for quite a while now, they have always been in the top 5.

    Now if you were just trolling, go find another bridge.
  • Penti - Thursday, May 29, 2014 - link

    Pretty sure Seagate has their in-house (SSD) SAS-controllers based of Marvell designs. So they obviously already has some semiconductor design competence and firmware team in this field. Though, they basically had to choose between SF, Marvell and the NAND-fabs own controllers as LAMD is an asset of Hynix, Toshiba has their custom Marvell-variant plus Indilinx through OCZ, Samsung has their own that they won't really share, Intel has their own, WD/HGST has their own assets. Lite-on and a few others do their own firmware to compete in this mix. A mix which is still larger than the three companies controlling HDD's. I guess Marvell will be left as the only independent player.
  • hojnikb - Thursday, May 29, 2014 - link

    Well, there is also phison, jmicron, SMI not just marvell :)

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