AMD buys SeaMicro to enter cloud server business

Feb 29, 2012
AMD buys SeaMicro to enter cloud server business

Chip maker Advanced Micro Devices has announced today that it is buying server startup SeaMicro for $334 million in a bold and surprising move to bolster its server business against long-time rival Intel. AMD has failed to secure a spot in the mobile space and now hopes to double down on its server business with SeaMicro, which specializes in highly dense and power-efficient servers for large-scale cloud computing.

AMD is interested in SeaMicro's core IP, which has to do with a customized chip that can handle the networking demands of more than 500 chips, all packed into a very tight space. SeaMicro was able to eliminate all but three of the chips on a standard server motherboard, which yielded servers that consumed only a quarter of the power and one sixth of the space of traditional x86 servers. AMD hopes to license the technology to other server vendors.

The acquisition will be a blow to Intel, which had a close partnership with SeaMicro and even developed a special version of its Atom processor for the SeaMicro servers. AMD expects to close the deal in March and will be paying $281 million in cash with the remainder paid in stock.

[via PC World]

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