I’ve been saying for a while that M&A is going to get more intense as companies gird for the battles ahead.
I see component vendors looking at doing vertical integration … not necessarily to compete with their customers, but to offer them alternatives, reference designs, etc. and capture a portion of the higher margin businesses.
This move gives Seagate control over Sandforce controllers, and PCIe flash.
See this link for more info. As I had noted, LSI’s flash business was not core to Avago. Less head scratching at this point.
But it does make sense. Seagate, WD, and Toshiba all want to move up market from pure component sales. This is why Seagate is investing in Xyratex appliances instead of shuttering it. I have other examples, but being under NDA means I can’t talk about them, but suffice it to say that we are pretty sure this is not the last N&A of the season … rather the beginning of a very interesting change in the market.