Good News for LSI's OEM Customers - Analyst Blog
December 30 2011 - 6:15AM
Zacks
LSI Corporation
(LSI) recently demonstrated the semi-conductor industry’s first
ever 28nm read channel in its True Store RC5100. By using its
innovative decoding design and low-density parity check (LDPC),
HDDs shall now be revolutionized with higher areal density,
efficient power usage and better performances.
The company’s latest TrueStore
venture, the RC5100 can be used in notebooks, desktop PCs, and
enterprise HDDs, thereby enhancing the host device’s power
efficiencies. It is scheduled for launch early 2012 to its OEM
customers.
At a time when technological
advancements seem to dominate economic development of nearly all
sectors, competition is both prevalent and fierce, whereby every
big player is fighting to gain some edge over the other making the
scope for innovations even more challenging. In this regard, LSI
makes an invaluable contribution which deserves commendable
approbation as transmission and storage of digital data has become
a burgeoning area of interest and reliance not only for industries
but also for general consumers.
LSI recently announced its third
quarter financial results of 2011, whereby it earned revenues worth
$547 million rising 20.7% year over year; well within management’s
expectations. The net income per share came to 14 cents which beat
the Zacks Consensus Estimate of 12 cents. Server and storage
semiconductor revenues came to $403 million accounting for nearly
74% of total revenues.
The long-term growth plans for its
storage technology solutions division are lucid from the aggressive
strategies being implemented by LSI, which include the acquisition
of SandForce Inc. for nearly $322 million. This, coupled with the
recent sale of NetApp Inc. for $480 million seems to put the
company in a favorable position as it enters 2012.
It is imperative that LSI continues
to actively focus on its innovations and profitable acquisitions to
battle its fierce competitors, Dot Hill Systems
Corporation (HILL), Infortrend Technology
Inc. and PMC-Sierra Inc. (PMCS).
LSI, established in 1980 and
headquartered in Milpitas, California, provides silicon-to-system
solutions, integrated circuits used in HDDs, computer servers,
communication and storage systems and also in PCs. It caters mainly
to OEMs directly and also operates through resellers and
distributors.
We currently have a Neutral
recommendation on LSI Corporation. The stock currently carries a
Zacks #3 Rank, which translates into a short-term rating of
Hold.
DOT HILL SYS CP (HILL): Free Stock Analysis Report
LSI CORP (LSI): Free Stock Analysis Report
PMC-SIERRA INC (PMCS): Free Stock Analysis Report
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