AMD buys SeaMicro for $334 million, makes bold stroke

AMD's game plan appears to take it beyond the processor market and more into integrated systems
Written by Larry Dignan, Contributor

AMD CEO Rory Read has said that the company would focus more on cloud computing and with a $334 million acquisition of SeaMicro he's putting some big money behind his plan.

The company said that it will buy SeaMicro, which makes high performance low power servers for cloud-based data centers. In another interesting twist, SeaMicro is known for making servers based on Intel's Atom chip.

It's unclear how long that Atom-based---and ARM too---relationship will last. AMD said that it would offer Opteron-based SeaMicro systems in the second half. AMD added that it will keep making its traditional server processors. One wild card for AMD will be competitors reaction to the SeaMicro purchase. In some respects, AMD is creating a channel conflict with long-time hardware partners.

AMD's game plan appears to take it beyond the processor market and more into integrated systems. SeaMicro servers are used for Web applications, social networking, search and video.

In a statement, Read said:

SeaMicro is a pioneer in low-power server technology. The unmatched combination of AMD's processing capabilities, SeaMicro's system and fabric technology, and our ambidextrous technology approach uniquely positions AMD with a compelling, differentiated position to attack the fastest growing segment of the server market.

SeaMicro is best known for its fabric, which includes multiple processors, memory, storage and input/output in one package.

AMD said the SeaMicro acquisition will add to earnings after 2012.

During a conference call for the financial community on Wednesday afternoon, Read informed investors and analysts that "as we take advantage of this opportunity, we're also firmly committed to our server business."

Describing 2012 as a year "about solid execution" for AMD, Read also reassured investors that operating expense and growth guidance predictions for 2012 would remain unchanged.


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