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Abhijit Y Talwalkar, president and CEO, LSI Corporation spoke
to Dataquest on the companys strategy post the Agere merger. Abhijit, born in
India, took over this role in May 2005, succeeding Wilfred J Corrigan, LSIs
founder. Talwalkar joined the company from Intel Corporation, where he served as
VP and co-general manager of the Digital Enterprise Group. He also served as VP
and GM for Intels Enterprise Platform Group. Talwalkar has more than twenty
years of experience in management and engineering in the semiconductor industry,
with positions in research, product development and marketing. Talwalkar
received his bachelors degree in Electrical Engineering from the Oregon State
University
What is the state of the transformation initiatives carried out
at LSI post the Agere merger?
The first significant change in LSIs strategy came in 2006 when we
announced that we are going fabless. We have been changing the companys
dimensions in the last 18-24 months as an overall strategy to become more
market-led and to establish sufficient scale in the growth markets. But, that
period is over. Now it is all about executing the new strategy in continuing to
drive our storage business. We aim to deliver consistently the needs of the
market, and grow.
The merger with Agere was a major step in the overall evolution
of the company and to enhance our positioning in the storage business. The other
objective was to enter the networking space considering the synergies between
networking and storage, in terms of base level technologies and the market. This
commonality will increase as more and more storage becomes IP or packet-based.
The other idea behind combining these two companies was
economies of scale. The semiconductor investments have been increasing in the
last ten years and companies are spending much more in R&D as the percentage
of sales goes up. We are now being asked to do more and more of systems. It just
does not stop at siliconfirmware, software, and architecting the systems is
also important. In some of the segments, we are developing the entire system.
Our R&D has also gone up in turn driving some of the consolidations that we
see. This has been very motivating.
Why did you choose to exit the consumer and mobility businesses,
considering that they are growing?
We have a two-pillar focus. The decision to exit mobility was made to make
sure we could participate in the market and have the scale. The mobility
business has a large market growing very rapidly, but there is a minimum level
of R&D scale, and the revenue scale had to be competitive. It was critical
for us to address that issue and it was also critical for Infineon to address
the same.
As for our existing consumer businesses, like the electronics
business, they were focused on segments associated with media processors and
other building blocks. We felt that we did not have the scale to stay in the
market. This market is highly volatile and unpredictable, and it is difficult to
say which consumer product would be successful. I am a firm believer in being #1
or #2 in the market place and having sufficient market scales. We have very good
scales in our storage business.
If you look at companies that sell either chips or other forms
of building blocks to the OEMs for storage, we are the biggest players in the
industry. We are ahead of our nearest competitor by two times and have the
widest range of product portfolio. We do everything from systems (for companies
like IBM) to very complex technology that goes into hard drives. Seagate, IBM,
and Samsung are some of our biggest customers. We sell to almost every single
hard drive OEM vendor. Our storage market continues to grow in every possible
segmentconsumers, enterprises, as well as service providers. We see storage
driving our growth in the next 5-7 years. Page(s) 1 2
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