Seagate buys SandForce from LSI in $450 million deal

Seagate cut its teeth building mechanical hard drives, and it has thus far stayed on the fringes of the SSD scene. But not anymore. The company announced today that it has entered a "definitive asset purchase agreement" to obtain LSI’s Flash Components Division and its Accelerated Solutions Division. The flash group includes SandForce, whose controllers are found in a wide range of SSDs, while the solutions group offers PCIe SSDs aimed at enterprise applications.

Semiconductor firm Avago Technologies bought LSI last year for $6.6 billion. It apparently wasn’t all that interested in SSDs, because Seagate will pay just $450 million for the two divisions. The deal is expected to close in the third quarter of this year, pending regulatory approval.

In the press release, Seagate CEO Steve Luczo says the acquisition will "accelerate our roadmap in this important and growing market" and "significantly enhance our flash storage offerings to supplement our existing portfolio." Right now, Seagate’s SSD offerings are largely limited to drives based on controller technology from Link_A_Media Devices, which is owned by memory maker SK Hynix.

Picking up SandForce gives Seagate access not only to the SF2000 controller used in drives from Intel, Kingston, and others, but also to the next-gen SF3700 chip that’s expected to arrive in the second half of this year. The solutions group adds an entire family of Nytro-branded PCIe SSDs primed for datacenters. That division is claimed to be the "second largest player in the PCIe flash space."

Before it was purchased by LSI In 2011, SandForce made a name for itself supplying SSD controllers to third-party drive makers. LSI continued that business model, but Seagate’s plans are unclear. The drive maker may not want to supply its competition, at least in the long term. Proprietary SSD controllers are a rather valuable commodity these days. We’ve reached out to Seagate for more details, and we’ll update this story when we receive them.

Geoff Gasior