If all goes well with the regulators and the lawyers, LSI Logic will slowly disappear over the horizon, going into the history books later this year, reduced to a Silicon Valley afterthought.
Keep in mind, we are talking about two iterations of the company: First, the LSI Logic (NYSE: LSI) created by Wilf Corrigan 33 years ago; and second the present day LSI Corporation (NASDAQ: LSI), on the precipice of being ushered into oblivion after eight-short years under the “management” of Wilf’s successor, Abhi Talwalkar.
There was a misguided celebration by some in the financial community in 2005 when Wilf at 67-years young turned over the reins to Abhi. This was the same Wilf Corrigan, who grew LSI Logic from zero revenues in 1981 to $1.8 billion when he finally hung up the cleats. No one was complaining when LSI Logic’s stock reached a post-split price of $90. Then there was the bursting of the Internet Bubble and the stock fell back to $3.
This is the same Wilf Corrigan, who founded the custom semiconductor business, known as ASICs or Application Specific Integrated Circuits. Sony reached out to LSI Logic when it needed a critical processor for the first two generations of the PlayStation. This is the same LSI Logic that pioneered the concept of System on a Chip. The company eventually reached $2.7 billion in revenues before the Bubble Burst.
When I was joined the company in 1995, I was awed by the sophistication of the company’s innovation, its library of complex intellectual property cores, and its all-star lineup of future technology C-level executives: John Daane (Altera); Brian Halla (National Semiconductor); Moshe Gavrielov (Xilinx); Jen-Hsun Huang (NVIDIA); Ronnie Vashishta (eASIC) and Bruce Entin (Silicon Valley Communication Partners). Bruce was not only the best boss in my career, but is an even better friend.
Enter Abhi in 2005. He took it from there until last December 16 when Avago Technologies announced its $6.6 billion cash acquisition of LSI. If Winston Churchill was still around to assess Abhi’s eight-year stewardship, he would be tempted to state: “Never in recorded history has so many waited so long for so little.”
Wilf’s Enduring Legacy
Looking back at my 10 years as the director of Corporate Public Relations for at LSI Logic (proper spelling), your author was honored and humbled to have the opportunity to work closely with Wilf Corrigan until shortly after he stepped down. Almost DailyBrett is proud of his tenure, but saddened by what could have been and the upcoming silent burial of LSI Logic.
Let’s face it: Many were downright scared of Wilf. He had the reputation for being a tough, no-nonsense businessman, a calling card he earned from his 1970s chairmanship of Fairchild. For some reason, Almost DailyBrett was not intimidated, but always respectful. Your author found Wilf to be extremely well read and not just in the business of technology, but politics, history and geography. Particularly on road trips, we talked for literally hours on these subjects.
An irony of Wilf’s career was Gould’s hostile takeover attempt of Fairchild circa 1979. It didn’t take long for Wilf to realize that Fairchild was in play. In the end, Wilf and the Fairchild Board of Directors found a White Knight in Schlumberger. In turn, Schlumberger drove Fairchild into the ground. The Schlumberger acquisition of Fairchild provided Wilf with the opportunity to create his own company, LSI Logic or Large Scale Integration Logic. And now his creation is being put out of its agony by Avago. Did the company have to end this way?
Mexico Acquiring Guatemala?
When it was time for Wilf to step down, LSI Logic HR head Jon Gibson unearthed Abhi from Intel. This was the same Intel that created legends by the names of Andy Grove, Gordon Moore, Robert Noyce and Craig Barrett. Would Abhi do the same for LSI Logic? 
Abhi guided the rebranding of LSI (dropping “Logic” from the name) and adopting the “flower” logo. Later LSI acquired Agere Systems for $4 billion, the technology equivalent of Mexico absorbing Guatemala. LSI’s present revenues are $2.5 billion. Why Agere? And for what purpose?
Until the announcement of the Avago acquisition, LSI’s stock remained mired for years at $8 or less. Being charitable, one can easily conclude the company underperformed. And now it will be absorbed into Avago, a company that once was HP’s semiconductor business.
An oft-heard complaint about Wall Street revolves around executive compensation, especially those who walk away with millions even when they underachieve. Abhi ($2.09 million annual salary, not including options) will inevitably get a huge package in recognition of his starring role in driving the company into the abyss. Undoubtedly, he will live a very comfortable life. 
And LSI Logic…it will always be LSI Logic to me…deserved a better fate, a much better fate.
http://dealbook.nytimes.com/2013/12/16/avago-to-buy-lsi-for-6-6-billion/?_r=0
http://allthingsd.com/20131216/in-chip-deal-singapores-avago-to-acquire-lsi-for-6-6-billion/
http://www.zacks.com/stock/news/118176/is-the-lsi-acquisition-in-jeopardy
http://www.usatoday.com/story/tech/2013/12/16/avago-lsi-acquisition/4038113/
From the May 20th, 2008 8-K SEC filing:
In the event of a qualifying termination after a change in control, a participant will be entitled to receive the following:
1. In the case of our Chief Executive Officer, a lump sum payment equal to 2.75 times his or her base salary and average bonus received over the preceding three years. In the case of a participant other than our Chief Executive Officer, a lump sum payment equal to two times the individual’s base salary and average bonus received over the preceding three years.
2. Full acceleration of all unvested equity awards.
3. Reimbursement of COBRA premiums for health insurance for 18 months.
4. In the event that a participant’s “parachute payments” are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, then LSI will make a supplemental payment to the participant in an amount that equals the excise tax on the parachute payments, plus any additional excise tax and federal, state and local and employment income taxes, on the supplemental payment. However, the total supplemental payment shall not exceed the sum of the participant’s (i) base salary immediately prior to the change in control, and (ii) target bonus for the year in which the change in control occurs.
Thank you for the 8-K language, Dan. I was never great at math, but it appears that the outgoing CEO in question will receive $5.7475 million + plus a boatload of unvested options, his COBRA paid for and excise tax relief. Sounds like a sweet deal, if you can get it. And one wonders why everyone gets their collective knickers in a twist over Wall Street executive compensation, particularly those who big time underachieve.
Brett – it looks like the qualifying termination plans for company directors stay in place for 6 years after the first day of the new company per the latest filing. I could be reading that incorrectly, but I know I’m not reading incorrectly that there are a lot of stock options in the hands of Abhi and Jeff Richardson (both ex-Intel) from their latest stock filings (at least 500K each). If I were to wax philosophical a bit on your piece……there have been more CEO’s come out of LSI from when Wilf was CEO than since Abhi has been CEO. There was a style, leadership, and management team brought over from Intel that was……unique. The reason for Agere was primarily the Seagate business and the read channel…..you asked. Seagate is now the single biggest LSI customer.
Miss our good old days together.
Miss the people, the emails exchange in 24/7, the energy & happiness there.
Glad to grow along with you in a 10 years time!
Being one of the first and the last witnesses, I shall always remember everyone and everything I experienced at LSI Hong Kong. Laughter or tears will grow old with me. They shall be a very important and unforgettable part of my life.
I came to LSI Logic in 1982. The people working there quickly became my second family. It was not unusual back then to go grab lunch in the cafeteria and have a VP sit down and have a conversation with you and get to know you. Or to work along side Elsa Corrigan on the test floor, or to be greeted by her in the lobby as the receptionist. So many good memories, people and much laughter made my 20 years there enjoyable no matter what job I held. I am so sad to see the end of this company.
I second my “compatriot’s” comments. LSI LOGIC had such a significant role in Silicon Valley’s history as did Fairchild before it. The unique thing about LSI was the spread of it’s culture and amazing technology Worldwide. RIP old friend!
It was a fun time in the early 90’s to deliver 50 designs/week and grow from $500M to $1B! Good times and great experiences ;>)
LSI Logic taught me so much – a lot of which stemmed from what someone told me right before I joined in 1992; it was the Valley’s biggest start-up. The passion and energy that was maintained through massive growth is an incredibly rare achievement, and how personal it was (e.g. it wasn’t the mask shop, it was Marge Wong’s shop, Wilf as the world’s biggest product marketing engineer,etc). So many great people there that have made an impact personally and professionally. RIP, LSI Logic, you’ll not be forgotten…
Shit happens. Deals done. They would have made you CEO had they thought you were the right fit. They didn’t. Practice better English, I’m surprised someone hired you in the first place.
Brett – you elegantly handled a troll on your own blog. Well done.
Alas, Wilf Corrigan was already the founder, chairman and CEO when I was hired to run LSI Logic Corporate Public Relations for a decade, beginning in 1995. The next five years were glory years for LSI Logic (e.g., Sony PlayStation design wins) until the Internet Bubble burst. As mentioned it is sad to see an overachieving company under Wilf become an underachieving company under his successor. And now the company is being ushered into the abyss. Farewell LSI Logic, farewell.
I have been 21 years at LSI Logic and these were 21 excellent years, in fact the best years in my professional life. Meeting all the wonderful inspiring colleagues all over the world was what made the “old” LSI Logic so successful. I do not want to miss one minute of my time with them. It’s so sad that it’s over now.
Kevin,
Great blog. I couldn’t resist providing my inputs.
I enjoyed working with you, the rest of the LSI Logic family and learning more than I can say over the 17 years I was there. I am glad that I left before Wilf left and the “Logic” seemed to disappear from the company. I bumped into Wilf a couple of weeks ago and I am pleased to say he still has the same personality and affect, even in Starbucks.
Best Wishes to the LSI Logic diaspora.
Ronnie
It is a little bit of a stretch to say that LSI Logic invented ASICs. LSI Logic was founded in 1981 and found many of their engineers from AMI, who already had a gate array family and California Devices who was led by Bob Lipp, probably the “real” inventor of ASICs. Several people, including Glenn Peniston from AMI have taken credit for the term “ASIC”, but for years there were basically three types – first was totally custom chips which AMI started making in 1966. Second were gate arrays which was LSI Logic’s only product in the early days and then standard cells came around after that. Another company that probably deserves a mention in this is Synertek. Even Fairchild had a gate array division around the time LSI Logic was founded. Nonetheless, I really enjoyed reading the article and it is nice to hear so many people have such fond memories of LSI Logic. It was the same way at AMI until they were purchased by Gould (Gould was hell bent to purchase SOMEONE).
Appreciate your comment Steve. First, I have to admit that I am biased having served as the director of corporate public relations for LSI Logic for the better part of a decade. Second, yes there were some that delved into custom semiconductors (e.g., gate arrays) before the formation of LSI Logic in 1981, and it was not considered to be a robust business. Having said that, Wilf and LSI Logic were the first to really turn ASICs into a mainstream business. For example, there is no denying that LSI Logic was the first pure-play ASIC company to achieve the $1 billion annual revenue mark in 1996. So when I wrote that Wilf pioneered the business, I was referring to how he brought ASICs along side MPUs, DRAMs, DSP and other chip technologies as major enterprises. Thank you for commenting. All the best, Kevin