'LSI Logic plans to Invest $100 mn and expand operations in India'

LSI is going through a major transformation with new management
and new product portfolio. How is this critical for your growth and sustenance?

LSI logic in the past was known as a broad-based ASIC provider. As a result
it was difficult to focus on the intellectual property needed for the long-term
success. We were spread thin over too many things. With a renewed focus on the
consumer and storage market, we discontinued some of our broad based ASIC
technology products. We have modified our product portfolio and realigned our
R&D focus, the results of which will take some time to show. To fuel growth,
we are keenly seeking opportunities for mergers and acquisitions.

Why did you choose to focus on consumer storage and what are
your expectations?

While selecting a suitable market space, we considered number of factors. We
were seeking a sustainable end market. The enterprise and consumer markets were
abuzz with transition to digital medium. A recent study revealed that the
digital data created in 2005 was more than all the data created before that for
many years. So, we wanted to be part of this stirring market. Secondly, we
assessed our strengths and wanted to leverage our competitive edge. In the
consumer space, we have expertise in media processing domain such as new
encoding and decoding. We are very strong in DVD recorder space in coding media
content. Media appliances market is another major area of interest, which
includes products for handheld devices with 3D graphics and handheld education
devices.

What kind of innovation can we expect from LSI logic, especially
on storage and consumer devices?

On the consumer side, we have a new product called Zevio that leverages our
video processing expertise, custom low power system on a chip development and
focuses on a new market of handhelds. Vtech will begin production of edutainment
game console based on our technology. On the storage side, you can expect a lot
of innovation on storge silicon products. We are going to introduce platforms
that target the volume space to bridge the gap and provide seamless silicon
systems all the way to chips on the board to hi-performance subsystems.

What is your investment plan for India?

Of the total 3,800 employees of LSI, around 300 are in LSI Logic India. We
have been making significant investments here, and plan to invest $100 mn over
the next decade in terms of building infrastructure and capacity. Every single
product in our product line up has the potential to be developed in India. Apart
from Bangalore and Kolkata, we are interested in expanding operations in other
cities as well.

What kind of market does India offer to LSI Logic?

We see India as a high potential silicon consumer as well as strong market
for storage. The ecosystem is fast evolving. The storage market here is expected
to grow 30% YoY and we want to be at the forefront. The market for DVD recorders
is fast growing here. On storage side, our focus is to get the likes of IBM to
get our storage products on the DVD recorders and start making solutions that
will help the manufacturers to hit the price points.

Malovika Rao

malovikar@cybermedia.co.in