LSI Chip Unit on the Block

During LSI's fourth-quarter conference call in January, Talwalkar hinted that more changes were imminent, as the company continued to sharpen its focus.

The company does not provide financial figures for the ZSP unit, but the broader communications unit, of which it is a part, accounted for 15% of LSI's 2005 revenue.

Some analysts had expected LSI to sell of its entire communications business. An LSI spokesman said that certain parts of the communications division fit into LSI's new plan.

"There are portions that have been classified as communications but that in fact are serving storage markets," said LSI spokesman Mitch Seigle.

Shares of LSI closed down 14 cents at $9.42.