AMD Enters Systems Business, Buys SeaMicro
By Mark LaPedus, SemiMD senior editor
In a major and surprise move, Advanced Micro Devices Inc. (AMD) has entered the systems business by acquiring a company that sells servers based on Intel Corp.’s processors.
AMD has signed a definitive agreement to acquire SeaMicro Inc., a pioneer in microservers for datacenters, for approximately $334 million. Through the acquisition of SeaMicro, AMD will offer server technology to its customers. SeaMicro was founded in 2007 and is backed by Khosla Ventures, Draper Fisher Jurvetson, Crosslink Capital and others.
The question is clear: Is AMD competing against its x86-based processor customers? This could be a big gamble — or a strategic mistake — for AMD and its new CEO, Rory Read. Over the years, rival Intel has entered — and exited — the systems business, as it soon found it was competing against its then-upset customers. For example, Intel sold supercomputers and fault-tolerant systems – and even Intel-branded PCs – in the 1990s, but it soon exited those markets, reportedly due to losses and customer pressure.
According to AMD, SeaMicro remains committed to its traditional server business, and will continue to focus and invest in this area. In January, SeaMicro, in cooperation with Intel and Samsung, announced the availability of the first fabric-based Intel Xeon micro server, the SeaMicro SM10000-XE. It also sells the SM10000-HD, based on Intel’s Atom processor. The SM10000-XE contains 64 quad-core Intel Xeon processor E3-1260L CPUs for 256 2.4 GHz cores in a 10 rack unit system, for 1,024 cores in a standard rack.
SeaMicro’s servers are aimed for large data centers and Cloud environments. 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, according to the company. A key to the product is SeaMicro’s supercompute fabric, which connects thousands of processor cores, memory, storage and input/output traffic. SeaMicro’s fabric supports multiple processor instruction sets.
AMD will continue to support all current SeaMicro customers while accelerating plans to deliver new platforms that combine AMD and SeaMicro technology. SeaMicro plans to offer servers based on AMD’s Opteron processor-based solutions in the second half of 2012.
“By acquiring SeaMicro, we are accelerating AMD’s transformation into an agile, disruptive innovator capable of staking a data center leadership position,” Read said. In August, AMD appointed Read as president and CEO. Read joined AMD from Lenovo Group Ltd., where he was most recently president and chief operating officer.
“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,” said Andrew Feldman, SeaMicro CEO, who 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,” he said. “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.”
