Component Makers Plan Storage Growth

Component suppliers are increasing their focus on storage in an effort to tap growing demand and reduce reliance on telecom gear.

Last week, for instance, component maker LSI sold its mobility business to Infineon for $450 million in cash in a deal that continues LSI CEO Abhi Talwalkar's long-term plan to narrow the company's focus onto storage and networking technologies.

LSI's been building up to this for awhile. Following the $4 billion acquisition of Agere Systems earlier this year, the firm sold its consumer products division to Magnum Semiconductor. (See LSI to Buy Agere for $4B and LSI Completes Sale.) Earlier in 2007, the vendor bought semiconductor startup SiliconStor in an attempt to link Serial Attached SCSI (SAS) and Serial ATA (SATA). (See LSI Lassos SiliconStor and LSI Pays $55M for SiliconStor.)

It's all part of a strategy that's aimed at bulking up storage and networking solutions while getting away from straight telecom and consumer electronics wares. LSI will jettison solutions for cellphone handsets and satellite digital radio when it completes the Infineon deal in the fourth quarter.

LSI wants to synergize its networking and storage expertise. "We're working very closely with the storage OEMs and the network OEMs on some innovative multiprotocol solutions," said Jeff Richardson, executive vice president of LSI's networking and storage products group at the company's analyst event in July.LSI plans a transceiver capable of support both Fibre Channel and 10-Gbit/s Ethernet, Richardson said. Also on the drawing board is a data management offering tied to solid state disk and traditional magnetic disk technology. (See IDC: SSDs to Go Mainstream, LSI Annexes StoreAge, and LSI Buys StoreAge.)

There is evidence that other component suppliers have put storage at the forefront of their networking plans. AMCC is said to be readying a SAS RAID controller for release October 1. The product, which is geared for networked disk arrays, will ship by the end of this fiscal quarter and is now in evaluation at two "major" but unnamed OEMs.

In a recent financial announcement, AMCC declared that storage components alone grew during the quarter ended June 30, 2007. The company predicts total net revenues of $50 million, down 29 percent sequentially, and plans are underway to use storage as a leg up on faltering profits.

Among AMCC plans are storage/networking synergies. "We're seeing true convergence of networking and storage," said AMCC SVP and GM of storage Barbara Murphy in a recent interview with Byte and Switch. The highest market growth, she points out, is in companies like Cisco that blur the line between networking and storage.

Some players are shifting their focus within storage. Ailing Vitesse sold sold its SAS and SATA chips to Maxim Integrated Products for $63 million last week. But Vitesse has chosen to hold onto its Fibre Channel and RAID-on-a-chip wares.Vitesse began considering getting into storage-networking parts as early as 2001, trying to bolster revenues in the face of the telecom downturn. But the vendor never developed its Fibre Channel chips beyond 2-Gbit/s. Now, freer to home in, perhaps it will pursue the market for faster solutions.

All these developments offer evidence, if more is needed, that storage networking demand is robust. Further, since chipmaker announcements typically predate finished products by about 18 months, it's clear we're in for a host of announcements around SAS and 10-Gbit/s Ethernet in 2008. In any case, storage is going strong and we can expect to see some interesting developments in the coming months.