LSI shook up the memory industry today following news of an agreement to purchase SandForce which, as you well know, produces the controllers inside many solid state drives. As things stand, LSI is prepared to pay $322 million in cash in an effort to bolster its presence in the expanding storage market. LSI will also assume $48 million of unvested stock options held by SandForce employees. The deal is expected to close in early 2012.

The announcement names SandForce as the "leading provider of flash storage processors," and that's not just PR talk. The company's chips can be found in flash products by more than two dozen manufacturers, including ADATA, Corsair, G.Skill, Mushkin, OCZ, Patriot and Super Talent. SandForce's controllers are differentiated by their "DuraClass" technology, which encompasses several other technologies such as RAISE, AES encryption and DuraWrite. Most notably, SandForce controllers don't require DRAM for caching functionality.

"The acquisition greatly enhances LSI's competitive position in the fast-growing server and storage PCIe flash adapter market, where the WarpDrive family of products from LSI already uses SandForce flash storage processors," reads LSI's press release. Although it undoubtedly plans to use SandForce's technology in its enterprise projects, we imagine LSI will continue licensing components. Nonetheless, OCZ isn't concerned about the deal.

"SandForce has been a great partner, and we expect the added resources of LSI will only benefit SandForce's customers. Moreover, because OCZ and SandForce previously contemplated this scenario, we expect that this combination will have no material impact to our existing product lines or business," wrote OCZ chief executive Ryan Petersen. Although OCZ has been heavily reliant on SandForce's chips, the company's future SSDs are expected to utilize technology by Indilinx, the controller manufacturer it purchased earlier this year for $32 million.