Investor Presentation

December 10th, 2008

LSI Proprietary 22

• This presentation contains forward-looking statements that are based on our current opinions and estimates. 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: our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; our ability to achieve anticipated synergies following our acquisition of Agere Systems; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; our ability to successfully and timely transition our assembly and test operations to third parties; and general industry and market conditions. In addition, the financial information in this presentation is summary in nature. For additional information, see the documents filed by LSI with the SEC, including the risk factors set forth in our most recent reports on 10-K and Form 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.

• In this presentation, we may discuss non-GAAP financial information. You can find comparable GAAP information and reconciliations between the non-GAAP and GAAP information on our website at http://www.lsi.com/webcast. Non-GAAP financial information excludes goodwill impairment, stock-based compensation, amortization of acquisition-related intangibles, restructuring of operations and other items, net, purchase accounting effect on inventory, loss on write-down of equity securities and acquired in-process research and development. It also excludes the income tax effect associated with the above mentioned items. We sometimes refer to these items as “special items.”

Forward Looking Statements and Non-GAAP Financial Measures

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LSI – Who We Are

LSI is a leading provider of silicon, systems and software solutions for the storage and networking markets.

We have strong market presence, unique competencies and the ability to capitalize on growth opportunities.

Our heritage includes more than 50 years of industry leadership and innovation with a strong IP portfolio.

We are committed to driving industry-leading technologies and standards.

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Key Takeaways

• We are in a very challenging economic environment where it is difficult to predict future demand.

• We have a strong balance sheet with positive quarterly operating cash flows.

– Recently repurchased $118M of 6.5% Convertible Note due in December, 2009 at a discount.

• The strategic decisions we have made over the past 18 months position us well for the future.

• We will be highly disciplined in controlling expenses in this uncertain demand environment.

• We have won significant designs with industry-leading customers.

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Revenues of $714MNon-GAAP gross margin of 48%Non-GAAP operating margin of 14%Cash and short-term investments of $1.2B at quarter end

LSI Q3 Highlights

Q3 2008 Financials

LSI - Q3 2008 Summary

Expanded our 6Gb/s SAS leadership, adding IBM, Dell, Fujitsu-Siemens, Intel and NEC as 6Gb/s SAS customers.Solely awarded new desktop, notebook, SoC and SSD wins at Seagate.Awarded new desktop, notebook, and enterprise SoCwins at Hitachi.Ramping in IBM DS5000 mid-range storage system.Wins with Huawei, Nokia-Siemens, and Nortel in Networking

Intellectual Property3% ($23M)

Q3 2008 Revenue

Networking DSPs, NPUs, Custom Silicon

20% ($142M)

Storage Systems

Storage Systems, RAID Adapters, RAID SW, System Mgmt SW

30% ($214M)

Storage Semiconductors FC Switch, External Storage

ICs, SAS, HDD SoCs

47% ($335M)

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Continued Year-Over-Year Progress

*Excluding special items

Q307 Q308 Operating Model

Long Term Drivers

Revenue $727M** $714M • Multiple long term catalysts in

Storage Systems, Storage Semi’s, Networking, and IP licensing

GM* 43.4% 48.3% 47%

• Maintain focus to produce consistent operating model performance

• Driven by product mix, costs, and volumes

R&D*as a % of Revenue

23.8% 22.8% 20%• Focusing R&D investments in areas

of strong differentiation• Revenue growth

SG&A*as a % of Revenue

12.2% 11.3% 10% • Increased efficiencies• Revenue growth

Op Inc*as a % of Revenue

7.3% 14.2% 17% • Driving towards achieving business model targets!

**The $727M includes $99M of revenue from Consumer and Mobility, which were sold in 2007

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Storage Semiconductors

Advanced OEM RAID solutions Value added RAID and data management software

Interface Controllers, Read Channels, SoCs, & Pre-Amps in all HDD categories

LSI: The Broadest OEM Storage Product Line: ~$2B in Annual Revenues – Largest Storage OEM supplier

Major Customers

#1

#1

#1

#2

Storage Systems & Software

Industry leading family of SAS components in Server and Storage systems

Proven custom silicon targeted at high performance SAN interconnect solutions (HBAs and Switches)

Hard Disk DriveComponents

SAS STD Products

SAN Custom Solutions

OEM RAID Systemsand Software

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THE Leading Provider of OEM External Storage Systems

*Source: IDC

Industry Proven Enterprise RAID Stack1st to market 2G & 4G FC, and SAS transitions

Growth OpportunitiesNew SAS/FC/iSCSI Entry Product lineHost RAID Software and RAID-on-Chip ExpansionIncreasing Data Management SoftwareWinning, ramping, and expanding Tier 1 customersFuture product line extensions

HighlightsIBM now shipping LSI 7900 technology under the DS5000 product lineBelieve we are worldwide leader in iSCSI based on volumes shipped by our OEM customersHP selected our Storage Virtualization Manager software suite

LSI Market Position Proven Revenue Performance ($M)

PB 1-3 (Entry-level) PB 4-6 (Midrange)

Growing External Storage TAM ($M)*

$0

$200

$400

$600

$800

$1,000

2002 2003 2004 2005 2006 2007

$0

$5,000

$10,000

$15,000

$20,000

$25,000

2006 2007 2008e 2009e 2010e 2011e

’02–’07 LSI Storage Systems CAGR = 11%

SAN Storage Systems Market

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LSI Market Position

* Source: IDC, April 2008

Growth in HDD ICs Through Most Competitive And Complete Portfolio

Broadest portfolio of productsRead Channel and Preamp leadership1st to market with perpendicular recording and iterative decoding in 65nmLeading supplier to the HDD and Tape industries

Growth DriversExpanding footprint within existing customers Design wins at new customersContinued share gains in SoC and Pre-Amps

HighlightsDelivered world’s fastest read channel – 4Ghz data rates for enterprise drivesSolely awarded multiple Desktop & Notebook SoCs at Seagate, in addition to 2 future generations of Enterprise SoCsSecured new SoCs in Hitachi’s desktop, notebook, and enterprise drives.Awarded Solid State Drive SoC at SeagateLSI technology shipped in > 1.7 billion drives

9.1%

32.4%

25.7%

17.3%

Other .5%

7.4%

HDD Provider Share (Units)*

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Clear leader in SAS; Co-developed SAS specBroadest family of SAS productsLeadership in servers and expanding in external storage

Growth DriversServer RAID-on-Chip (ROC) integrationMegaRAID+ROC business expansionSAS in external storage systemsSAS-SAS/SATA bridge silicon

HighlightsDot Hill selected LSI 3Gb SAS controllerDell, Fujitsu-Siemens, IBM, Intel, NEC, and Sun have selected our 6Gb SAS RoC solutions

* Source: IDC

Expanding SAS leadership

LSI Market Position

Higher PerformanceLower PowerLower CostGreater Density

$0

$100

$200

$300

$400

$500

$600

$700

2007 2008e 2009e 2010e 2011e

SAS in External Storage

Increase $$ due to SAS Multiplier Effect

External Storage ICs

Server ICs

Mill

ions

Server & External Storage Silicon’07-’11 CAGR = 8.8%*

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0.0

5.0

10.0

15.0

20.0

2006 2007 2008e 2009e 2010e 2011e

THE Leading Provider of Fibre Channel SAN SiliconWell positioned to gain share

*Source: Dell’Oro Group** Estimated*** Source: LSI Estimate, IDC

Named Strategic Supplier of the Year by BrocadeIn development on Fibre Channel over Ethernet silicon designs and expect to ramp at major HBA and Switch companies in 20098Gb/s designs in production

HighlightsHighlightsSAN Switches

8M+ FC HBA Silicon Shipped Since 2000LSI #1 Share***

SAN Ports ’06-’11 CAGR = 17% *

SAN HBAs

Switch HBA

Mill

ions

of P

orts

LSI ShareIn 2007**

AdditionalOpportunity

12

Service Provider Network

WirelessBase Station

2/3/4G

Multi-ServiceAccess Nodes

IP / ANBackbone

Media GatewayVoice / Video

Enterprise NetworkTransactional / Data Warehouse High Performance Content Delivery

MSBG LAN/SAN Router & Switches

Central Office

EnterpriseConnectivity

Business Gateways

Service & Media Gateways

WirelessAccess

WirelineAccess

LSI Networking Market Focus

OEM Customer Focus

Awarded 2 significant design wins for Gigabit Ethernet Phy productsNokia Siemens now shipping LSI communications processor & software in new mini-DSLAMShipping StarPro media processors to 3 of top 4 networking OEMsNortel announced availability of gateways incorporating LSI LLP, NPs, VoIP SoCs, and Ethernet Phys

Highlights

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LSI – Where We’re GoingThe strategic decisions we have made over the past 18 months, combined with our strong balance sheet, position us well for the future.

•Storage Systems – Continued growth in entry level platforms and strong mid-range

product cycle– Ramping in new IBM DS5000– Won HP for SVM software

•Storage Semi’s– 6Gb SAS wins at Dell, Fujitsu-Siemens, Intel, IBM, NEC, and

Sun– Awarded new desktop, notebook, and enterprise SoCs at

Seagate and Hitachi– New Solid State Drive SoC win at Seagate

•Networking – Won 2 significant gigabit Ethernet Phy designs with a leading

networking silicon provider– Won new designs at Huawei, NSN, and Nortel

•Broad patent portfolio with active IP licensing business