Storage Market Consolidation Continues As AMCC Nabs 3ware

AMCC, a San Diego-based company best known for the design, development and marketing of high-bandwidth ICs for WANs, is looking to expand its storage portfolio with Sunnyvale, Calif.-based 3ware, said Steve McClure, director of market for storage products at AMCC. 3ware provides Serial ATA (SATA) storage solutions with applications in disk-to-disk backup, near-line storage, NAS and high-performance computing.

AMCC's acquisition of 3ware follows its $190 million acquisition last August of JNI, which provided Fibre Channel hardware and software components for SANs.

AMCC purchased 3ware because it matched AMCC's criteria for an acquisition target, McClure said. The company is looking for storage vendors in growth markets that already have a revenue base, which is the case with 3ware. More specifically, he said, the company is addressing the growing SATA space, and has RAID intellectual property that fits well with AMCC's semiconductor business.

By bringing 3ware into AMCC, the company will be able to scale down Fibre Channel technology for the small- and midsize-business market, which requires low-cost products that are easy to deploy, McClure said. "We estimate that 75 percent of 3ware's customer base are common target customers for our Fibre Channel host bus adapters [from the JNI acquisition], he said.

The acquisition, which is subject to antitrust approvals, is expected to close on April 1, McClure said.

Once the acquisition is complete, AMCC will still have $700 million in the bank, and it would like to spend at least part of that sum on more company purchases, McClure said. "We are looking for other acquisitions in the SAN and WAN space, our two core segments," he said.