LSI Corporation

1981–2004

LSI Logic Corporation was incorporated in November 1980 by Wilfred J. Corrigan and began operating in early 1981 using leased facilities in Santa Clara, California. The name "LSI" referred to Large Scale Integration. Corrigan recruited co-founders Bill O'Meara (VP Marketing and Sales), Rob Walker (VP Engineering) and Mitchell "Mick" Bohn (CFO). Initial funding of $6 million came from a consortium of venture capitalists, including Kleiner Perkins Caufield & Byers II, Institutional Venture Partners, and Technical Development Capital Ltd. A second round of $16 million in funding from Sequoia Capital, a group of investment bankers from the UK and First Interstate Bank came In March 1982. That year, LSI Logic had $5 million in sales and a loss of $3.7 million.

The initial plan called for a line of CMOS gate arrays created from “masterslices” which were uncommitted transistors customized to a specific application by the deposition of unique metal interconnections. The intention was to have the masterslices manufactured by external semiconductor companies and then do the metallization themselves. In order to jump start the business, they licensed an existing CMOS gate array design from California Devices Inc. (CDI) and reverse engineered and improved on an ECL gate array design from Motorola.

The first interactive CAD system was called LSI Design System (LDS). The initial EDA flow was based on simulation from TEGAS and place and route from Silvar-Lisco, integrated on Megatek hardware. What made them unique from other ASIC vendors at the time was that they willing to ship the software to their customers rather than keeping it in-house, which was the strategy used by market leaders at the time. In 1982 they started development of their own in-house CAD tools and moved to Silicon Graphics hardware. By 1988, the EDA industry had developed enough that customers wanted to be able to use 3rd party tools.

Sales grew rapidly and they were able to launch a successful initial public offering on the Nasdaq exchange on May, 13 1983. The offering was underwritten by Morgan Stanley & Co and Hambrecht & Quist. 7 million shares of common stock were issued at a price of $21 per share. The stock hit a peak of $25.50 during the day and closed at $24 a share which valued the company at $588M. Once underwriters options were exercised the total offering brought in $153 million. Stock symbol: LLSI.

In 1984, LSI Logic formed a Japanese affiliate, Nihon LSI Logic Corporation, and British subsidiary LSI Logic Ltd. In February 1985, a Canadian subsidiary, LSI Logic Corporation of Canada, Inc., was formed.