PMC Moves to Establish Category Leadership with Flash Controller Acquisition
May 29 2013 - 4:01PM
Business Wire
PMC-Sierra, Inc. (PMC®) (Nasdaq: PMCS), the semiconductor
innovator transforming networks that connect, move and store big
data, today announced that PMC has entered into a definitive
agreement to acquire Integrated Device Technology, Inc.’s (IDT®)
(Nasdaq: IDTI) Enterprise Flash Controller Business and certain PCI
Express (PCIe) Switch assets for $100 million, subject to certain
purchase price adjustments.
IDT’s Enterprise Flash Controller Business accelerates PMC’s
entrance into the rapidly growing enterprise solid-state drive
(SSD) market with leading-edge PCIe flash controllers, including
the world’s first NVM Express (NVMe) flash controller. PMC believes
that it will be able to improve its time-to-market by approximately
two years due to the early product leadership and a robust design
win pipeline, including wins spanning tier one datacenter, original
equipment manufacturer (OEM) and SSD customers.
According to International Data Corporation (IDC), the
enterprise SSD market segment is expected to comprise half of the
total SSD market in sales, reaching approximately $7 billion in
2016. PMC estimates that the combined PCIe and SAS controller total
available market for these enterprise SSDs will quadruple and reach
in excess of $500 million in 2016.
“Flash-based storage is causing a major disruption in enterprise
storage due to the dramatic performance advantages of solid-state
drives,” said Greg Lang, president and chief executive officer of
PMC. “IDT’s PCIe controllers are particularly well suited for
server-based SSDs targeted at cloud data center customers. The
acquisition of IDT’s Enterprise Flash Controller Business is a
strong complement to our current enterprise 12Gb/s SAS SSD
controller product offering.”
As part of the transaction, PMC will acquire IDT’s Enterprise
Flash Controller Business, including all related intellectual
property (IP), certain PCIe Switch technology and 75 patents
overall. The Company expects to make employment offers to
approximately 50 employees.
IDT has played a leading role in the standards efforts focused
on broadening the adoption of PCIe SSDs. IDT is a founding member
of the NVM Express Work Group, the industry organization formed a
few years ago to standardize the software interface of enterprise
and client SSDs. IDT is a member of the NVMe promoter group, which
is directing the standard’s evolution, featuring companies such as
Dell, Intel, EMC, NetApp, Oracle and Cisco. The IDT team is a
leader in driving the controller product development in parallel
with their standards work and their early product focus has enabled
them to deliver the world’s first NVMe controllers.
“Dell is an active proponent of driving industry standards and
has worked closely with the industry to establish standard-based
PCIe SSD options to accelerate server application performance,”
said Forrest Norrod, vice president and general manager, Dell
Server Solutions. “We are pleased to see the combination of these
talented teams and look forward to continuing our collaboration
with PMC and within the NVMe consortium in the future.”
The board of directors of PMC and the board of IDT have approved
the transaction. It is expected to close in the third quarter of
2013, subject to certain regulatory approvals and other customary
closing conditions specified in the definitive agreement.
Conference Call Information
PMC will conduct a conference call with analysts and investors
today at 2 p.m. Pacific Time. The Company will broadcast the
conference call via webcast over the Internet and will post a
companion slide presentation on the Investors section of the PMC
website at http://www.pmcs.com. To listen to the webcast, please
dial (888) 771-4371 using passcode 34969421 or visit
http://investor.pmcs.com. The webcast will be recorded and
available for replay until 10 days following the conference
call.
Safe Harbor Statement
This release contains certain forward-looking statements,
including statements regarding the expected benefits of the
transaction to the Company, market segment expectations and the
Company’s plans for the acquired business that are subject to risks
and uncertainties. Actual events and results may differ materially
from these projections. The potential risks and uncertainties
include, among others, that the transaction may be delayed or may
not be consummated at all, that the Company may not successfully
integrate the acquired business or its personnel, that relevant
market segments may not develop as expected and that the Company's
offerings may not prove attractive to customers in those market
segments. The Company’s SEC filings describe factors that may
affect the Company’s business and results generally, including
PMC’s limited revenue visibility due to variable customer demands,
market segment growth or decline, orders with short delivery lead
times, customer concentration, and other items. The Company does
not undertake any obligation to update the forward-looking
statements.
About PMC
PMC (Nasdaq:PMCS) is the semiconductor innovator transforming
networks that connect, move and store big data. Building on a track
record of technology leadership, the Company is driving innovation
across storage, optical and mobile networks. PMC’s highly
integrated solutions increase performance and enable
next-generation services to accelerate the network transformation.
For more information, visit www.pmcs.com. Follow PMC on Twitter,
LinkedIn and RSS.
© Copyright PMC-Sierra, Inc. 2013. All rights reserved. PMC and
PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the
United States and other countries, and PMCS is a trademark of
PMC-Sierra, Inc. Other product and company names mentioned herein
may be trademarks of their respective owners. PMC is the corporate
brand of PMC-Sierra.
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