AMD to acquire SeaMicro for $334 million

by CXOtoday Staff    Mar 02, 2012

Through the acquisition AMD aims to accelerate its strategy to deliver disruptive server technology to its OEM customers serving cloud-centric data centres.

Chip-maker AMD said that it has signed a definitive agreement to acquire SeaMicro for approximately $334 million.

Through the acquisition of SeaMicro, AMD aims to accelerate its strategy to deliver disruptive server technology to its OEM customers serving cloud-centric data centres.

California-based SeaMicro supplies low-power server technology targeting the cloud data centre market. According to research firm IDC, this segment will consume about 2 million units of CPUs in 2012, growing at a 15 percent CAGR through 2015. The company was founded in 2007 and has approximately 80 employees.

“By acquiring SeaMicro, we are accelerating our transformation into an agile, disruptive innovator capable of staking a data centre leadership position. The 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,” said Rory Read, President and CEO, AMD.

AMD said that it plans to offer the first AMD Opteron processor-based solutions that combine AMD and SeaMicro technology in the second half of this year.

AMD has been going through a tough time in the server market for the last few years. The company’s market share fell from around 15 percent in 2007 to around 6.5 percent in 2011. In November last year, the company said that it will cut 1,400 jobs as part of a restructuring plan.

The acquisition could help AMD improve sales because SeaMicro’s products have traditionally been using chips from Intel.

“We believe this acquisition accelerates AMD’s roadmap in the fastest-growing server segment by bringing disruptive system design IP in house,” wrote Canaccord analyst Bobby Burleson in a research note.

With SeaMicro’s fabric technology and system-level design capabilities, AMD said that it 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.