Aliso Viejo-based QLogic Corp. held its market share lead in the fourth quarter over rival Emulex Corp. of Costa Mesa in a key segment of networking electronics.
QLogic held nearly 55% of the market in fibre-channel adapters, flat from the prior quarter, according to new data provided by Redwood City-based market tracker Dell’Oro Group Inc.
Fibre-channel adapters connect storage equipment to servers.
They are used by large companies in the financial services, healthcare, pharmaceutical and manufacturing industries, as well as corporate data-center customers to increase storage, back up huge data files, and improve performance and scale.
Emulex, LSI
Emulex held almost 41% of the fibre-channel adapter market, up 1.1% from the third quarter.
Milpitas-based LSI Corp. was a distant third with 1.3%.
Fourth-quarter global sales in that segment topped $181.5 million, up almost 12% from the prior quarter.
QLogic had $99 million of the total, followed by Emulex with $73.7 million.
The fourth quarter typically is the strongest quarter in the fibre-channel adapter market.
Big customers such as Hewlett-Packard Co., IBM Corp. and Dell Inc. mark their biggest sales, as companies spend the last allotment of their annual budget, according to Tam Dell’Oro, founder of the research firm.
“Q4 came in with some seasonal strength,” she said.
• Headquarters: Aliso Viejo
• Business: networking gear
• Founded: 1992
• Ticker symbol: QLGC (Nasdaq)
• Market value: about $1.75 billion
• Notable: leads on market share for fibre-channel adapters with 55%
Sales Up
Global sales in the fibre-channel adapter market in 2011 hit nearly $696 million, up 1.6% from a year earlier.
“It’s a mature, slow-growing market,” Dell’Oro said.
QLogic captured $380.5 million of global total, and Emulex accounted for $275.2 million.
2011 marked the eighth straight year QLogic has held the market share lead in fibre-channel adapters.
Sales in that market account for more than 60% of QLogic’s annual revenue of about $600 million.
Palo Alto-based Hewlett-Packard is QLogic’s largest customer, and accounted for about 25% of sales in 2010, according to filings with the Securities and Exchange Commission.
Fibre-channel adapters account for about 58% of Emulex’s annual sales of about $450 million.
IBM Corp. in New York is Emulex’ biggest customer and accounted for 37% of business in its most recent fiscal year ending in the July quarter.
QLogic and Emulex have one of the county’s oldest rivalries.
Emulex spun off QLogic in the early 1990s.
Ethernet
The rivals are expected to face stiff competition from a wider field in coming years amid a shift from fibre-channel to Ethernet-based technology. The growing 10-gigabit Ethernet networks market will be the next battlefield, with demand for capacity expected to surge on virtual data centers and cloud computing.
Ethernet adoption has been slow but the race is expected to heat up with established players such as Irvine-based chipmaker Broadcom Corp. and Intel Corp. in Santa Clara entering the fray, as well as emerging companies such as Irvine-based Solarflare Communications Inc.
