SAN JOSE, Calif. -- LSI Corp. has signed a definitive agreement to acquire the assets and certain associated intellectual property of the RAID adapter business of Applied Micro Circuits Corp. (AMCC) for approximately $20 million in cash.
The so-called 3ware products from AMCC (San Diego) include SAS and SATA RAID adapters. 3ware adapters are sold to end users through a worldwide network of channel partners including leading storage distributors and system builders.
3ware was bought by AMCC for $150 million in 2004, according to Daniel Amir, an analyst at Lazard Capital Markets. ''3ware generated revenue of $48 million in 2008 and we expect it to generate about $30 million in 2009 at about 50 percent margin,'' he said in a report.
The move expands LSI's storage offering. ''Strategically, the acquisition makes sense, as it enables LSI to sell into third-party channels and complements its direct sales business,'' he added.
This transaction allows AMCC to focus on its core strengths in the development of chips for packet-based networks. In January, communications semiconductor supplier AMCC said that President and CEO Kambiz Hooshmand will step down on June 1 after a loss. He will be replaced by Paramesh Gopi, currently the company's chief operating officer.
The next month, AMCC cut more than 100 jobs and said it would reduce employee compensation.