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.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool owns shares of IBM and Marvell. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.