Saturday, March 24th 2012

AMD Completes Acquisition of SeaMicro

AMD today announced it completed the acquisition of SeaMicro Inc., a pioneer in energy-efficient, high-bandwidth microservers, for approximately $334 million, net of cash assumed.

The acquisition of SeaMicro, which will now become AMD's Data Center Server Solutions business, enables AMD to accelerate its strategy to deliver disruptive server technology and provide its customers serving Cloud-centric data centers with highly-differentiated AMD-based solutions beginning this year.

"Our unique fabric technology is truly one of the crown jewels of the Cloud," said Lisa Su, senior vice president and general manager, Global Business Units, AMD. "The combination of this innovative technology with our processor design expertise greatly enhances our ability to attack the fastest growing portion of the server market with industry-leading low-power, low-cost, high-bandwidth solutions."

The purchase price consists of a cash payment of approximately $293 million as well as AMD's assumption of options to purchase approximately 6,475,000 AMD shares and the issuance of approximately 322,000 shares of AMD restricted stock. This transaction is included in AMD's first quarter of 2012 earnings guidance.
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34 Comments on AMD Completes Acquisition of SeaMicro

#1
Phxprovost
Xtreme Refugee
by: Super XP
So we all understand the vital importance this is for AMD. :)
I can see AMD making 5 x this little investment in a matter of about 5 to 7 years. That is good business.
Honestly I don't see this being important at all, and I don't see AMD even being around in 5-7 years. Call me crazy but it seems that the "big players" in the industry are starting to create proprietary systems with parts available on the market and want nothing to do with outside influence where it is not necessary.
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#2
Vulpesveritas
by: Phxprovost
Honestly I don't see this being important at all, and I don't see AMD even being around in 5-7 years. Call me crazy but it seems that the "big players" in the industry are starting to create proprietary systems with parts available on the market and want nothing to do with outside influence where it is not necessary.
I find that funny seeing as AMD is working towards a more forward thinking architecture than most of the other big players, with heterogeneous computing and all. And AMD does have both a fanbase and are looking to have superior chips in the low cost mainstream segment for consumers. The main thing they'll be competing with is ARM, which AMD is looking like they may design ARM chips as well in the future.
I wouldn't count AMD out just yet. Not to mention they have the legacy of ATI's discrete graphics line. And saying that will go away is rather unlikely, as they'll probably be around as long as desktops are, and I don't see desktops dying off completely so long as there are enthusiasts, schools, and small private servers who want desktops for their reliability and the fact that they stay in once place (hence the schools). Not to mention, there are people out there who don't like laptops, period.
But eh call me crazy for thinking desktops will probably survive a couple decades more, if but as a niche product.
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#3
AvonX
Well things are really hard for amd now.
It seams they are targeting them to kick them out of the game completely.
If amd really had cash for r&d they could do allot of good stuff.
That is what intel was always afraid of.
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#4
Vulpesveritas
Well yes, they're hard for AMD right now, and it all comes down really to how their APUs and if their puchase of seamicro will help them get any ground in the server market.
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#5
de.das.dude
Pro Indian Modder
by: trickson
$293 million is a lot of cash. What did they get for this really? Any performance gains to the CPU/GPU? I do not get what AMD is doing here. They seem to keep buying things up. What benefit is this going to be to the end-users. Get it now?:confused:
there is a difference between business growth and business development.

when you know that your researchers are poop and they will come up with same stuff even after you invest millions on them, its more feasible to increase your business.

Specially with the new tablet market springing up, demands for highly efficient processors are increasing. And it will keep increasing till portable devices exist.
This makes it a quite good investment.
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#6
AvonX
by: de.das.dude
there is a difference between business growth and business development.

when you know that your researchers are poop and they will come up with same stuff even after you invest millions on them, its more feasible to increase your business.

Specially with the new tablet market springing up, demands for highly efficient processors are increasing. And it will keep increasing till portable devices exist.
This makes it a quite good investment.
I think you are partially correct but in a wrong way.
When you have the correct basis,fabs and lots of cash your researchers will not be poop as you are saying.
Yes the purchase of Sea Micro was business move,AMD needs to increase cash flow.
It has nothing to do with researchers,AMD is fables now anyway.
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#7
Dent1
by: trickson
Why would Intel not have thought of this if it were such a smart move? Oh yeah Intel has such a HUGE share of the market already!
Intel is doing the same thing as far as acquisitions.

In fact the majority, if not all multi-nationals including Microsoft, Creative Labs, AMD, Intel etc survive by acquiring smaller companies.

Just to give you an example, Intel acquired McAfee for $7.68 billion. Despite Intel not being in desktop security business. But that is how companies grow. Business 101.
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#8
Thefumigator
by: Dent1
Intel is doing the same thing as far as acquisitions.

In fact the majority, if not all multi-nationals including Microsoft, Creative Labs, AMD, Intel etc survive by acquiring smaller companies.

Just to give you an example, Intel acquired McAfee for $7.68 billion. Despite Intel not being in desktop security business. But that is how companies grow. Business 101.
Exactly, Intel also bought several other little companies. What intel needs is to buy a GPU company right now.

The most importants buy-outs we have seen so far is AMD buying ATI and Adobe buying macromedia. And why not, Oracle buying Sun Microsystems and Google buying Motorola.

Those were all noticeable by end users because everybody has flash installed, everybody can choose an ATI card, and everybody heard the term "java" and "android"

As we aren't going to see products for end users out of seamicro, it won't be noticeable for us. Hey nor even opteron is made for end users.

If you think about this, Texas Instruments is listed in the top ten greatests chip companies. Its not thanks to its calculators... nor even thanks to its ARM-compatible mobile chips line. Its thanks to the whole productline for industries and end users.

So yes, you get big by doing whatever it takes to make money. AMD should have bought small companies more often. Also, they should have keep Spansion.
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#9
makwy2
Another day, another smaller company gobbled up by an bigger one.
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