AMD Exits High Density Server Business, Mothballing SeaMicro

Thanks to Kenny Rogers, every gambler now knows, 'You've got to know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run'. Heeding that advice, AMD is exiting the dense server systems business, effectively folding its hand on SeaMicro, which it acquired three years ago for $334 million.

AMD made the news public on Thursday when delivering its fiscal first quarter financial results. The Sunnyvale chip designer posted a net loss of $180 million on revenue of $1.03 billion, the latter of which is down 17 percent sequentially and 26 percent compared to the same quarter a year ago when it posted a profit of $49 million.

SeaMicro Server

"Building great products, driving deeper customer relationships, and simplifying our business remain the right long-term steps to strengthen AMD and improve our financial performance," said Dr. Lisa Su, AMD president and CEO. "Under the backdrop of a challenging PC environment, we are focused on improving our near-term financial results and delivering a stronger second half of the year based on completing our work to rebalance channel inventories and shipping strong new products."

Obviously those "strong new products" AMD plans to ship will not include dense server systems. The decision to pull out of the market falls under the simplify portion of AMD's long-term strategy. It may also represent a desire by Dr. Su to realign AMD with her vision of what the company should be focusing on, as the SeaMicro acquisition was made under former CEO Rory Read.

AMD still owns the intellectual property for SeaMicro's fabric technology. Furthermore, AMD will ship its first ARM processors later this year, which might be well suited for dense servers like the ones SeaMicro used to build. What that means is that AMD is not interested in building and selling dense server systems, but will still cater to the overall market by focusing on the development of server processors and related technologies.

Via:  AMD
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