Feeds

LSI Agere merger creates storage, networking and CE chip giant

'Combining of interests'

Internet Security Threat Report 2014

Long standing semiconductor specialist LSI Logic, which leads in the provision of chips which underpin enterprise high end storage systems, has merged with Agere Systems, a company with a similar product set, in a deal valued at around $4bn.

LSI stock fell slightly on the news and today the company is valued at $3.73bn while Agere has risen in value to $3.36bn, in line with the transaction price. LSI will be the surviving brand name and the company also made moves to sweeten the deal by announcing a $500m stock buy back.

Agere is mostly about network processors, gigabit ethernet switches, DSPs and network attached storage, while LSI is in all of those businesses, plus it offers DVD and DVR processor chips, advanced codecs for its DSPS and was, until recently, providing the chips that underpinned the iPod MP3 media processor for PortalPlayer. This deal was lost earlier this year to Samsung and had a $100m-plus knock on effect at LSI Logic which physically prepared the PortalPlayer chip masks for United Microelectronics in Taiwan to build.

LSI is also a Mobile DTV Alliance member, so was clearly targeting DVB-H and other handset designs, probably with its DSP chips.

The two have entered a definitive merger agreement under the terms of which Agere shareholders will get 2.16 LSI shares for each share they own.

The companies have a combined revenue of $3.5bn for the past year operate in 20 countries, and employ 9,100 staff and have 10,000 issued and pending US patents.

The merger looks like a straight combining of interests in and around storage, which will now dwarf the CE chips that LSI made, which could mean that this may be spun out later to allow the chip company to further specialise on enterprise, rather than consumer chips.

Copyright © 2006, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

Internet Security Threat Report 2014

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
IBM storage revenues sink: 'We are disappointed,' says CEO
Time to put the storage biz up for sale?
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.