LSI Acquires SandForce for $322 Million

LSI Corporation has announced that it will buy SandForce, a semiconductor startup, for $322 million, although some, like Colleen Taylor of Gigaom, expect the value of the deal to rise to $400 million.

The acquisition gives the fabless components designer some significant firepower as the sales of solid state drives gather momentum. SandForce is a major player when it comes to designing and manufacturing flash memory controllers for solid state drives, and the acquisition comes as Intel announces that it wants Ultrabooks to own up to 40 per cent of the consumer laptop market by the end of next year.

Ultrabooks will use flash-based drives primarily and the market for controllers is set to explode over the next 12 months. Another big market for flash drives is data centers, with enterprises willing to pay a very significant premium for speed.

LSI is not giving up on the traditional storage market though as it continues to serve traditional hard drives companies like Seagate and Western Digital, the two biggest hard disk drive makers in the world.

SSD controllers have emerged as a vital piece of any SSD device and is often a decisive component that can bring some significant improvements to performance and stability.