AMD completes acquisition of server startup SeaMicro

By on March 27, 2012, 12:00 PM

Less than a month after announcing the deal, AMD has officialy completed its acquisition of SeaMicro, a startup that specializes in building high-density low-power servers. The deal is valued at $334 million, including $293 million in cash, nearly 6.5 million AMD share options, and 322,000 issued shares of restricted stock.

The acquisition of SeaMicro, which will now become AMD's Data Center Server Solutions business, is intended to help AMD regain lost server market share from Intel and better position itself against future competition from ARM-based players. That said, the move came as a bit of a surprise considering all the high-density servers SeaMicro currently sells are based either on Intel Xeon or low-power Atom processors.


SM10000-64HD High Density, Low Power Server

AMD clearly sees a future for Bulldozer and upcoming architectures in low power servers, however. The firm will continue to sell and support SeaMicro servers equipped with Intel chips "for the foreseeable future," but they also plan to release the first SeaMicro servers based on AMD Opteron chips by the end of the year.

This means AMD will be competing with some of its customers, but the company claims it has no intentions of becoming a big player as a server vendor. Instead, it hopes to license SeaMicro's Freedom Fabric technology, which allows a computer to be scaled down to a motherboard the size of a deck of playing cards and can be stacked together to form powerful servers that use up less space and power than traditional servers.

Since SeaMicro’s revenues or other financials were not disclosed, it's difficult to gauge whether the price paid was cheap or steep, but Forbes makes some assumptions of AMD’s growth expectations from SeaMicro (hint: AMD paid a handsome price). After the acquisition was announced, Intel revealed it had been offered the chance to buy the California-based microserver specialist, but passed on the offer.

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