AMD To Acquire SeaMicro, Eyes Low-Power Server Market

AMD announced Wednesday its plans to buy low-power microserver vendor SeaMicro in a $334 million deal.

AMD said the acquisition will allow the company to accelerate its route to market with server technologies, specifically for data centers that rely on the cloud. SeaMicro’s fabric technology will position AMD to deliver “industry-leading server building blocks” to handle workloads such as dynamic web content and social networking.

AMD CEO Rory Read said in a conference call announcing the acquisition that the move was in reaction to increasing levels of cloud computing being used to reduce power consumption and costs in today’s data centers. As data center and server structures continue to morph with the adoption of the cloud, AMD wants to position itself as a leader in the space, he told listeners.

"We are clearly skating to where the puck is going," Read said.

[Related: AMD Announces New Radeon HD 7770, 7750 Graphics Cards ]

AMD said its own Opteron server technology combined with SeaMicro’s will yield a range of low-power server processors to help reduce data center cost and complexity, while providing an overall boost in performance. The company plans to launch its first Opteron processors based on a combined AMD and SeaMicro architecture during the second half of 2012.

Andrew Feldman, CEO of the Sunnyvale, Calif.-based SeaMicro, will become general manager of AMD's newly created Data Center Server Solutions business.

"SeaMicro was founded to dramatically reduce the power consumed by servers, while increasing compute density and bandwidth,” Feldman said in a statement. “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."

Despite the restructure and appointment of Feldman, Read said AMD remains “firmly committed” to its traditional server business. The CEO also said that the acquisition of SeaMicro will have no impact on AMD's 2012 financial guidance.