LSI Logic buys Agere

Deal creates a storage and networking chip giant

LSI Logic is to merge with Agere Systems in a $4bn deal expected to close early next year.

The new entity will keep the LSI Logic name and offer an expanded portfolio of semiconductors for storage and networking, as well as consumer electronics.

Although not widely known outside of the components industry, both firms play critical roles in the building of products such as hard disk drives, Raid arrays and storage-area networks.

“We think this in an inflection point for the industry because with storage in particular we have unprecedented scale, from hard drives to systems sold into the enterprise,” said Phil Brace, LSI senior vice-president for corporate planning.

Although LSI and Agere cross over in some areas, Brace said there are many areas where the new LSI will be able to have a greater say in current and emerging markets.

“We think it’s a deal where one and one can make three,” he said. “LSI is powerful in the enterprise while Agere has strength in drive electronics, mobile and consumer, so we can build within and beyond.”