LSI Launches New Product - Analyst Blog
March 08 2012 - 11:52AM
Zacks
LSI Corporation (LSI) recently launched a
new line of MegaRAID SATA+SAS controller cards. This new line is
designed to deliver the high I/O transaction performance
required to accelerate the most demanding database applications and
datacenter workloads.
LSI offers a variety of direct-attach RAID solutions as part of
its MegaRAID ® and 3ware ® product families.
These solutions enable data storage using multiple drives and
various data replication strategies to minimize the impact of the
failure of any one drive.
The MegaRAID and 3ware products include single-chip
RAID-on-motherboard solutions, a broad family of PCIe RAID
controller boards featuring SAS and SATA interfaces, and
software-only RAID products for entry level RAID data
protection.
The controllers are expected to be generally available in April
through the LSI worldwide network of distributors, system
integrators and VARs.
Over the last two years, LSI Corp. has invested heavily in a
number of product lines, some of which have started to contribute
to the top line in 2012. The company began to address markets for
storage systems products beyond its traditional OEM customer base
in an effort to grow and diversify its business.
The company recently divested its lower margin Engenio storage
systems. We believe the divestiture of the storage systems business
will positively impact the margin structure along with ramp up of
higher margin networking and SAS products.
LSI recently completed its acquisition of Sand Force, Inc. for
$322 million. The acquisition is expected to strengthen LSI’s
strong position in storage technology solutions. We view this
acquisition as positive as it will also use the cash derived from
the divestiture of the external storage systems business
(accounting for roughly 27% of total sales) to NetApp Inc. for $480
million in cash.
The acquisition is also expected to enhance LSI's competitive
position in the fast-growing server and storage PCIe flash adapter
space. Management stated that PCIe flash-based adapters and flash
storage processors will together represent a greater than $2
billion TAM expansion for LSI in the next several years.
We have a Neutral recommendation on LSI Corporation. In the
short-run, we have a Zacks #2 Rank, which translates into a Buy
rating.
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