PMC Got IDT Flash Controller Business and Some PCIe Switch Assets

PMC-Sierra, Inc. has entered into a definitive agreement to acquire Integrated Device Technology, Inc.‘s (IDT) enterprise flash controller business and certain PCIe Switch assets for $100 million, subject to certain purchase price adjustments.

IDT’s enterprise flash controller business accelerates PMC’s entrance into the growing enterprise SSD market with PCIe flash controllers, including the NVM Express flash controller. PMC believes that it will be able to improve its time-to-market by approximately two years due to the product leadership and a design win pipeline, including wins spanning tier one datacenter, OEM and SSD customers.

According to IDC, the enterprise SSD market segment is expected to comprise half of the total SSD market in sales, reaching approximately $7 billion in 2016.

PMC estimates that the combined PCIe and SAS controller total available market for these enterprise SSDs will quadruple and reach in excess of $500 million in 2016.

"Flash-based storage is causing a major disruption in enterprise storage due to the dramatic performance advantages of solid-state drives," said Greg Lang, president and CEO, PMC. "IDT’s PCIe controllers are particularly well suited for server-based SSDs targeted at cloud data center customers. The acquisition of IDT’s enterprise flash controller business is a strong complement to our current enterprise 12Gb/s SAS SSD controller product offering."

"The divestiture of our PCIe flash controller business enables IDT to capitalize on our early investments in this disruptive technology," said Ted Tewksbury, president and CEO at IDT. "Going forward, we will focus our R&D investments on advanced timing, wireless power, memory interface, and communications signal chain solutions. This enhanced focus will accelerate operating margin expansion while sustaining long-term revenue growth."

As part of the transaction, PMC will acquire IDT’s enterprise flash controller business, including all related IP, certain PCIe switch technology and 75 patents overall. The company expects to make employment offers to approximately 50 employees.

IDT has played a role in the standards efforts focused on broadening the adoption of PCIe SSDs. It is a founding member of the NVM Express Work Group, the industry organization formed a few years ago to standardize the software interface of enterprise and client SSDs. It is a member of the NVMe promoter group, which is directing the standard’s evolution, featuring companies such as Dell, Intel, EMC, NetApp, Oracle and Cisco. The IDT team is driving the controller product development in parallel with their standards work and their early product focus has enabled them to deliver the first NVMe controllers.

"Dell is an active proponent of driving industry standards and has worked closely with the industry to establish standard-based PCIe SSD options to accelerate server application performance," said Forrest Norrod, VP and GM, Dell, Inc.‘s server solutions. "We are pleased to see the combination of these talented teams and look forward to continuing our collaboration with PMC and within the NVMe consortium in the future."

The board of directors of PMC and the board of IDT have approved the transaction. It is expected to close in the third quarter of 2013, subject to certain regulatory approvals and other customary closing conditions specified in the definitive agreement.

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