FOR IMMEDIATE RELEASE		APRIL 27, 2011
Investor Relations Contact: Sujal Shah 610-712-5471 sujal.shah@lsi.com		Media Relations Contact: Mitch Seigle 408-954-3225 mitch.seigle@lsi.com

cc11-23

LSI Reports First Quarter 2011 Results

MILPITAS, Calif., April 27, 2011 — LSI Corporation (NYSE: LSI) today reported results for its first quarter ended April 3, 2011.

On March 9, 2011, LSI entered into a definitive agreement to sell its external storage systems business to NetApp, Inc. The transaction is expected to be completed in May, 2011, and the financial results of this business have been classified as discontinued operations in the company’s financial statements. The company’s guidance for the first quarter included expected financial results for the external storage systems business, therefore financial measures including and excluding this business have been provided in this news release.

First Quarter 2011 News Release Summary

•		First quarter 2011 revenues from continuing operations of $473 million
•		First quarter 2011 GAAP* income from continuing operations of 3 cents per diluted share
•		First quarter 2011 non-GAAP** income from continuing operations of 10 cents per diluted share
•		First quarter operating cash flows of $108 million

Second Quarter 2011 Business Outlook

•		Projected revenues from continuing operations of $465 million to $495 million
•		GAAP* (loss)/income from continuing operations in the range of ($0.02) to $0.07 per share
•		Non-GAAP** income from continuing operations in the range of $0.07 to $0.13 per share

First quarter 2011 revenues from continuing operations were $473 million, essentially flat year over year compared to $473 million generated from continuing operations in the first quarter of 2010, and compared to $471 million generated from continuing operations in the fourth quarter of 2010.

Including results from discontinued operations, first quarter 2011 revenues would have been $629 million, a 1% decrease year over year compared to $637 million reported in the first quarter of 2010, and compared to $664 million reported in the fourth quarter of 2010.

First quarter 2011 GAAP* income from continuing operations was $19 million or 3 cents per diluted share, compared to first quarter 2010 GAAP income from continuing operations of $14 million or 2 cents per diluted share. First quarter 2011 GAAP results compare to fourth quarter 2010 GAAP income from continuing operations of $5 million or 1 cent per diluted share. First quarter 2011 GAAP income from continuing operations included a net charge of $47 million from special items, consisting primarily of $30 million of amortization of acquisition-related items, $14 million of stock-based compensation expense, and $3 million of net restructuring and other items.

First quarter 2011 GAAP net income was $10 million or 2 cents per diluted share, compared to first quarter 2010 GAAP net income of $23 million or 3 cents per diluted share. First quarter 2011 GAAP net income compares to fourth quarter 2010 GAAP net loss of $13 million or 2 cents per share.

First quarter 2011 non-GAAP** income from continuing operations was $65 million or 10 cents per diluted share, compared to first quarter 2010 non-GAAP income from continuing operations of $78 million or 12 cents per diluted share. Fourth quarter 2010 non-GAAP income from continuing operations was $53 million or 8 cents per diluted share.

First quarter 2011 non-GAAP net income was $82 million or 13 cents per diluted share, compared to first quarter 2010 non-GAAP net income of $92 million or 14 cents per diluted share. Fourth quarter 2010 non-GAAP net income was $90 million or 14 cents per diluted share.

Cash and short-term investments totaled approximately $682 million at quarter end. The company completed first-quarter purchases of approximately 15 million shares of its common stock for approximately $97 million.

“Our first quarter revenues were strong, bolstered by market share gains with key hard disk drive system-on-chip customers that partially offset normal seasonal

patterns,” said Abhi Talwalkar, LSI president and chief executive officer. “I’m also pleased with our execution in the quarter, which contributed to both solid gross margin performance and effective operating expense control. We’re now well positioned to achieve our current business model and to establish a new, richer business model as we transition to becoming a leading, pure-play provider of semiconductors that enable growing storage and networking applications.”

Bryon Look, LSI CFO and chief administrative officer, said, “First-quarter operating cash flows of $108 million were healthy while our balance sheet remained strong and debt free. Our net cash position increased to $682 million after purchasing nearly 15 million shares of our common stock during the quarter.”

LSI Second Quarter 2011 Business Outlook
For Continuing Operations

		GAAP*		Special Items		Non-GAAP**
Revenue		$465 million to $495 million				$465 million to $495 million
Gross Margin		45.5% — 50.0%		$20 million to $30 million		52.0% — 54.0%
Operating Expenses		$205 million to $225 million		$15 million to $25 million		$190 million to $200 million
Net Other (Loss)/Income		$5 million				$5 million
Tax		Approximately $7 million				Approximately $7 million
(Loss)/Income From Continuing Operations Per Share		($0.02) to $0.07		($0.06) to ($0.09)		$0.07 to $0.13
Diluted Share Count		610 million				610 million

Capital spending is projected to be around $20 million in the second quarter and approximately $55 million in total for 2011.

Depreciation and software amortization is projected to be around $17 million in the second quarter and approximately $75 million in total for 2011.

LSI will hold a conference call today at 2 p.m. PDT to discuss first quarter financial results and the second quarter 2011 business outlook. Internet users can access the conference call at http://www.lsi.com/webcast. Subsequent to the conference call, a replay will be available at the same web address.

Forward-Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI’s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited

to: a delay in the closing of the sale of our external storage systems business to NetApp; our ability to eliminate costs related to our external storage systems business; our ability to repurchase our common stock at prices we believe to be advantageous; the impact of the recent earthquake, tsunami and nuclear power plant events in Japan; our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; and general industry and market conditions. For additional information, see the documents filed by LSI with the Securities and Exchange Commission, and specifically the risk factors set forth in the company’s most recent reports on Form 10-K and 10-Q. LSI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

LSI Corporation (NYSE: LSI) is a leading provider of innovative silicon, systems and software technologies that enable products which seamlessly bring people, information and digital content together. The company offers a broad portfolio of capabilities and services including custom and standard product ICs, adapters, systems and software that are trusted by the world’s best known brands to power leading solutions in the Storage and Networking markets. More information is available at www.lsi.com.

# # #

1.

All LSI news releases (financial, acquisitions, manufacturing, products, technology, etc.) are issued exclusively by PR Newswire and are immediately thereafter posted on the company’s external website, http://www.lsi.com.

2.

LSI and the LSI & Design logo are trademarks or registered trademarks of LSI Corporation.

3.

All other brand or product names may be trademarks or registered trademarks of their respective companies.

LSI CORPORATION
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)

		April 3,				December 31,				April 4,
Assets		2011				2010				2010
Current assets:
Cash and short-term investments		$	682.3			$	676.6			$	1,015.5
Accounts receivable, net			286.1				326.6				298.6
Inventories			155.0				186.8				185.8
Prepaid expenses and other current assets			68.4				73.3				107.2
Assets held for sale			236.3				0.5				17.2
Total current assets			1,428.1				1,263.8				1,624.3
Property and equipment, net			188.0				223.2				215.4
Goodwill and identified intangible assets, net			592.0				749.8				887.7
Other assets			146.8				188.1				223.1
Total assets		$	2,354.9			$	2,424.9			$	2,950.5
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt		$	—			$	—			$	350.0
Other current liabilities			484.3				484.6				509.4
Total current liabilities			484.3				484.6				859.4
Pension, tax and other liabilities			611.0				622.8				618.9
Total liabilities			1,095.3				1,107.4				1,478.3
Stockholders’ equity:
Common stock and additional paid-in capital			5,932.3				6,004.3				6,141.6
Accumulated deficit			(4,358.3	)			(4,368.5	)			(4,386.0	)
Accumulated other comprehensive loss			(314.4	)			(318.3	)			(283.4	)
Total stockholders’ equity			1,259.6				1,317.5				1,472.2
Total liabilities and stockholders’ equity		$	2,354.9			$	2,424.9			$	2,950.5

LSI CORPORATION
Consolidated Statements of Operations (GAAP)
(In thousands, except per share amounts)
(Unaudited)

		Three Months Ended
		April 3,				December 31,				April 4,
		2011				2010				2010
Revenues		$	473,264			$	470,657			$	472,672
Cost of revenues			225,459				217,059				227,627
Amortization of acquisition-related intangibles			21,818				28,914				28,835
Stock-based compensation expense			1,813				1,821				1,416
Total cost of revenues			249,090				247,794				257,878
Gross profit			224,174				222,863				214,794
Research and development			136,124				136,087				132,842
Stock-based compensation expense			6,223				4,654				6,020
Total research and development			142,347				140,741				138,862
Selling, general and administrative			54,917				55,231				55,730
Amortization of acquisition-related intangibles			8,319				8,949				8,948
Stock-based compensation expense			5,631				5,226				5,687
Total selling, general and administrative			68,867				69,406				70,365
Restructuring of operations and other items, net			2,806				(1,043	)			1,620
Operating income			10,154				13,759				3,947
Interest expense			—				—				(3,894	)
Interest income and other, net			4,288				7,701				(8,807	)
Income/(loss) before income taxes			14,442				21,460				(8,754	)
(Benefit)/provision for income taxes			(4,104	)			16,905				(23,102	)
Income from continuing operations			18,546				4,555				14,348
(Loss)/income from discontinued operations, net of tax			(8,392	)			(17,956	)			8,172
Net income/(loss)		$	10,154			$	(13,401	)		$	22,520
Basic income/(loss) per share:
Income from continuing operations		$	0.03			$	0.01			$	0.02
(Loss)/income from discontinued operations		$	(0.01	)		$	(0.03	)		$	0.01
Net Income		$	0.02			$	(0.02	)		$	0.03
Diluted income/(loss) per share:
Income from continuing operations		$	0.03			$	0.01			$	0.02
(Loss)/income from discontinued operations		$	(0.01	)		$	(0.03	)		$	0.01
Net Income		$	0.02			$	(0.02	)		$	0.03
Shares used in computing per share amounts:
Basic			615,450				616,809				656,528
Diluted			629,733				616,809				664,315

A reconciliation of certain GAAP measures to non-GAAP measures is included below.

		Three Months Ended
		April 3,				December 31,				April 4,
Reconciliation of GAAP net income/(loss) to non-GAAP net income:		2011				2010				2010
GAAP income from continuing operations		$	18,546			$	4,555			$	14,348
Special items:
a) Stock-based compensation expense — cost of revenues			1,813				1,821				1,416
b) Stock-based compensation expense — R&D			6,223				4,654				6,020
c) Stock-based compensation expense — SG&A			5,631				5,226				5,687
d) Amortization of acquisition-related intangibles — cost of revenues			21,818				28,914				28,835
e) Amortization of acquisition-related intangibles — SG&A			8,319				8,949				8,948
f) Restructuring of operations and other items, net			2,806				(1,043	)			1,620
g) Write-down of investments			—				—				11,600
Total special items from continuing operations			46,610				48,521				64,126
Non-GAAP income from continuing operations		$	65,156			$	53,076			$	78,474
Non-GAAP income from continuing operations per share
Basic		$	0.11			$	0.09			$	0.12
Diluted		$	0.10			$	0.08			$	0.12
GAAP net income/(loss)		$	10,154			$	(13,401	)		$	22,520
Special items:
a) Total special items from continuing operations			46,610				48,521				64,126
b) Stock-based compensation expense — discontinued operations			319				2,856				3,308
c) Amortization of acquisition-related intangibles — discontinued operations			886				2,453				2,453
d) Restructuring of operations — discontinued operations			23,811				49,548				—
Non-GAAP net income		$	81,780			$	89,977			$	92,407
Non-GAAP net income per share:
Basic		$	0.13			$	0.15			$	0.14
Diluted		$	0.13			$	0.14			$	0.14
Shares used in computing non-GAAP per share amounts:
Basic			615,450				616,809				656,528
Diluted			629,733				626,079				690,395

LSI CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

		Three Months Ended
		April 3,				December 31,				April 4,
		2011				2010				2010
Operating activities:
Net income/(loss)		$	10,154			$	(13,401	)		$	22,520
Adjustments:
Depreciation and amortization *			56,007				65,954				67,017
Stock-based compensation expense			13,986				14,557				16,431
Non-cash restructuring of operations and other items, net			10,824				45,681				(10	)
Write-down of investments			—				—				11,600
(Gain)/loss on sale of property and equipment			(239	)			(142	)			3
Unrealized foreign exchange loss/(gain)			1,379				(2,063	)			(2,215	)
Deferred taxes			(43	)			3,478				98
Changes in assets and liabilities:
Accounts receivable, net			40,471				(12,737	)			40,396
Inventories			(12,651	)			33,348				(16,441	)
Prepaid expenses, assets held for sale and other assets			(1,066	)			506				(8,095	)
Accounts payable			24,273				(11,672	)			(8,547	)
Accrued and other liabilities			(35,066	)			(11,869	)			(16,979	)
Net cash provided by operating activities			108,029				111,640				105,778
Investing activities:
Purchases of debt securities available-for-sale			(15,530	)			(20,425	)			—
Proceeds from maturities and sales of debt securities available-for-sale			12,958				20,320				11,254
Purchases of property, equipment and software			(21,542	)			(25,080	)			(27,276	)
Proceeds from sale of property and equipment			310				281				22
Proceeds from a repayment on a note receivable			—				10,000				—
Net cash used in investing activities			(23,804	)			(14,904	)			(16,000	)
Financing activities:
Issuance of common stock			17,319				18,826				3,635
Purchase of common stock under repurchase programs			(96,791	)			(32,199	)			(26,208	)
Net cash used in financing activities			(79,472	)			(13,373	)			(22,573	)
Effect of exchange rate changes on cash and cash equivalents			(11	)			(558	)			(2,117	)
Net change in cash and cash equivalents			4,742				82,805				65,088
Cash and cash equivalents at beginning of period			521,786				438,981				778,291
Cash and cash equivalents at end of period		$	526,528			$	521,786			$	843,379