Memory and Storage

Silicon Motion Buys Chinese SSD Startup

29 April 2015

Silicon Motion Technology Corp., a supplier of NAND flash memory access controllers, has agreed to acquire Shanghai Baocun Information Technology Co. Ltd., a supplier of enterprise solid-state drives (SSDs) and storage arrays to the Internet sector in China, for $57.5 million.

The deal has been approved by the boards of directors of both companies and is subject to customary closing conditions, including regulatory review. The deal is expected to close before the end of July.

"China has become the largest Internet market in the world and its Internet companies have already widely adopted SSDs for their data centers and hyperscale servers,” says Wallace Kou, CEO of Silicon Motion, in a statement.

Recently, Kou says, Chinese corporations and government organizations have begun using SSDs for data virtualization. Increasingly, these organizations are turning to Shanghai Baocun Information Technology—which operates under the name Shannon Systems—for SSDs.

Shannon has a customer base of about 80 companies in China, including Internet companies in e-commerce, on-line travel, and mobile security. It is expecting sales of between $14 million and $18 million in 2015.

Dr. Zueshi Yang, co-founder of Shannon, Marvell’s previous SSD controller architect and a Seagate veteran, says being acquired by Silicon Motion will enable Shannon to grow its R&D and sales infrastructure faster.

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