AMD Takes Over SeaMicro Low-Power Server Maker

AMD Drastically Changes Server Strategy with Acquisition of Server Maker

by Anton Shilov
02/29/2012 | 03:49 PM

Advanced Micro Devices on Wednesday drastically shifted its server strategy by acquiring SeaMicro, a manufacturer of low-power servers. Through the acquisition of SeaMicro, AMD will be accelerating its strategy to deliver disruptive server technology to its OEM customers serving Cloud-centric data centers. AMD will get SeaMicro for approximately $334 million, of which approximately $281 million will be paid in cash.

 

With SeaMicro’s Freedom supercomputer fabric technology and system-level design capabilities, AMD hopes to be uniquely positioned to offer industry-leading server building blocks tuned for the fastest-growing workloads such as dynamic web content, social networking, search and video. Foremost among SeaMicro’s innovations is its supercomputer fabric, which connects thousands of processor cores, memory, storage and input/output traffic with up to 1.28Tb/s (160GB/s) speed. SeaMicro’s fabric supports multiple processor instruction sets. SeaMicro solutions are currently deployed in multiple sites across the globe.

AMD’s Opteron server microprocessors and chipsets combined with SeaMicro technology are expected to provide customers with a range of processor choices and platforms that can help reduce data center complexity, cost and energy consumption while improving performance. AMD plans to offer the first AMD Opteron processor-based solutions that combine AMD and SeaMicro technology in the second half of 2012.

At present, SeaMicro exclusively sells so-called micro-servers powered by Intel Xeon and Intel Atom microprocessors. Although there are not a lot of rivals for SeaMicro, eventually the firm will compete against large server makers that are AMD's customers. It will be interesting to see whether those clients of AMD will continue to use Opteron microprocessors in case SeaMicro will continue to ship own-brand servers. Knowing AMD's traditional business approaches (e.g. not to rival with own customers), it is likely that eventually developments of SeaMicro will simply be marketed as reference designs or platforms to other server makers, which will boost AMD's server business market share. In addition, platforms that enable ultra-dense ultra low-power servers will let AMD compete not only against Intel Corp., but also against ARM Holdings, which is incoming to servers in several years from now.


SeaMicro server card

“By acquiring SeaMicro, we are accelerating AMD’s transformation into an agile, disruptive innovator capable of staking a data center leadership position. 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,” said Rory Read, president and chief executive of AMD. 

SeaMicro technologies offer substantial advantages in large data center and Cloud environments. Cloud data centers are projected to be the fastest growing segment of the server market through 2015, according to IDC. Current systems featuring SeaMicro technology typically use one quarter the power and take one sixth the space of traditional servers with the same compute performance, yet deliver up to 12 times the bandwidth per core.

“Cloud computing has brought a sea change to the data center -- dramatically altering the economics of compute by changing the workload and optimal characteristics of a server. SeaMicro was founded to dramatically reduce the power consumed by servers, while increasing compute density and bandwidth.  By becoming a part of AMD, we will have access to new markets, resources, technology, and scale that will provide us with the opportunity to work tightly with our OEM partners as we fundamentally change the server market,” said Andrew Feldman, SeaMicro CEO, who will become general manager of AMD’s newly created data center server solutions business.

AMD will continue to support all current SeaMicro customers while accelerating plans to deliver new platforms that combine AMD and SeaMicro technology and enable AMD’s OEM partners to bring differentiated solutions to market.

The acquisition does not change AMD’s 2012 financial guidance and the transaction is expected to be accretive to earnings after 2012. AMD will fund the cash portion of the acquisition with existing cash reserves.