Semiconductor designer LSI
LSI is focusing on that opportunity and making inroads with Seagate Technology
It's always cool to be big in an important sector like disk controllers, but it would be even better if the disk industry wasn't in a state of sudden oversupply. Having more manufacturing capacity than end-user demand puts pricing pressure on the drive builders, who then naturally would like to negotiate cheaper component contracts from suppliers like LSI.
Under these circumstances, it is no surprise to see LSI's sales growing at a muted 9% clip year-over-year to $629 million, or to see GAAP earnings cut in half to $0.04 per share. Management acknowledges that low demand levels in its end markets may linger, but looks to new product ramps and healthy sell-through partnerships with leading systems builders including IBM
Storage systems will always be important, and LSI is busy cementing its place in the supplier firmament. That should pay off handsomely later on.