AMD to pay $334 million for SeaMicro Inc: micro servers

AMD look to be taking their battle against Intel to the next level by acquiring SeaMicro Inc for $334 million. SeaMicro are a start up company who produce ‘micro servers' that cram many processors into small chassis. This helps to reduce the physical footprint for businesses and lowers the energy overhead.

These products have proven popular with companies who buy servers in large quantities to run consumer oriented websites.

The Wall Street Journal add “AMD has long battled Intel in making chips for servers, as well as PCs, but it has struggled lately in the larger systems because of late products and other issues. Both companies, meanwhile, face increasing competition from companies making lower-power chips that are based on architecture developed by ARM Holdings PLC. Last year, Hewlett-Packard Co. announced a partnership with Calxeda Inc., a start-up making ARM-based micro servers.

Most chip makers avoid selling systems that use their chips, because such moves can put them in competition with their customers. But Rory Read, a former Lenovo Group Ltd. executive who became AMD chief executive in August, has stressed the need for unconventional tactics against its much-larger rival.”

AMD said in a briefing yesterday that the main reason for buying SeaMicro wasn't to sell servers, but to ‘offer communications technology' and other elements developed by SeaMicro to allow other server manufacturers to make similar designs.

AMD have said that they do plan to support SeaMicro's current customer base by selling servers for the forseeable future. Ironically the systems currently use Intel processors, but AMD will be obviously working on using AMD Opteron chips in the servers in Q3/Q4 this year.

You can read more on this story over here.

Kitguru says: Energy and space saving servers. Makes sense.

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