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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  • Penti - Thursday, May 29, 2014 - link

    They are all too small to count or not focused on performance/mainstream drives. Will check the new article over here at Anand's on the new Jmicronstuff though. Not really a choice for mainstream drives from Seagate though. Or future PCIe m.2/sata-express drives.
  • weimeng4359 - Thursday, May 29, 2014 - link

    I totally agree with you.
    Marvell's chip is suitable for development by some design house like Lite-on.
    Other small SSD controller companies would be acquired by NAND vendors or be dead.
  • orenc17 - Thursday, May 29, 2014 - link

  • hojnikb - Thursday, May 29, 2014 - link

    Is anand gonna reviewer the new SMI based ssds, that came out in the last few weeks ?
  • Taft12 - Thursday, May 29, 2014 - link

    I can think of Kingston, Mushkin and Intel... Are there any other OEM brands shipping SSDs today with Sandforce controllers?
  • hojnikb - Thursday, May 29, 2014 - link

    There are literaly shitton of companys selling sandforce based drive. There must be atleast 50 companies (if not more) that sell sandforce based drives.
  • Kristian Vättö - Thursday, May 29, 2014 - link

    Yup. Last time I saw SandForce had over 50 partners, although not all of them are in the retail SSD business (but there are a ton of those too).
  • Penti - Thursday, May 29, 2014 - link

    Most of these has at some point had SF-drives – if one likes to jog their memory about some of the vendors out there. Companies like OWC also use SF exclusively thus far. Let's see if they take the step into PCIe-based SSD's. You will find over 20 companies offering SSD's on an online retailer such as Newegg. Only a few of those have stayed away from SF.

    If you like to see some of the names (directed at thread starter) you also have Verbatim and ADATA which seems to use SF in their high-perf drives. Patriot use SF too. PNY and Team group seems to be exclusive SF-users too. Look around and you will probably see a lot.
  • creed3020 - Thursday, May 29, 2014 - link

    My Seagate 600 240GB SSD has been excellent, and I'm sure that is everything to do with the LAMD sourced controller. With this aquistion I don't see them needing to lean on an external controller anymore.

    I'm not if I really like the combo fo Sandforce and Seagate. Neither brand has a rock solid realiability record. Combine them and I'm not sure what you get?!?
  • JarredWalton - Thursday, May 29, 2014 - link

    Here's an interesting thought: Avago tends to be more of an enterprise company, right? Yes, they offer a bunch of smaller components, but they have a lot of industrial, military, etc. stuff. If so, they may have looked at SandForce and LSI and over time decided they just weren't a good fit. It was a completely new market for Avago and would require a lot of changes; Seagate on the other hand has a big consumer focus (with some enterprise stuff as well), so they could do more there. I'm sure there are plenty of reasons for the sale, but it certainly doesn't instill much confidence in SandForce for me. After the various reliability issues with earlier SF controllers/drives, if SF-3700 was headed the same way Avago may have just decided, "You know what: we don't want to be involved with the inevitable fallout." Seagate already has plenty of experience dealing with unhappy customers, so not a problem. :-)

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